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Social networks as a catalyst of economic change

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  • Sauter, Nicolas

Abstract

This letter finds that East Germans with strong social ties invested earlier in a popular new financial product after reunification, while long-term ownership remained unaffected. Hence, studies of the economic impact of social networks should distinguish transitory from long-run effects.

Suggested Citation

  • Sauter, Nicolas, 2015. "Social networks as a catalyst of economic change," Economics Letters, Elsevier, vol. 134(C), pages 45-48.
    • Handle: RePEc:eee:ecolet:v:134:y:2015:i:c:p:45-48
    DOI: 10.1016/j.econlet.2015.06.010
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    References listed on IDEAS

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    1. Konrad B. Burchardi & Tarek A. Hassan, 2013. "The Economic Impact of Social Ties: Evidence from German Reunification," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 1219-1271.
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    4. repec:bla:jfinan:v:59:y:2004:i:1:p:137-163 is not listed on IDEAS
    5. Fidrmuc, Jan & Gërxhani, Klarita, 2008. "Mind the gap! Social capital, East and West," Journal of Comparative Economics, Elsevier, vol. 36(2), pages 264-286, June.
    6. Harrison Hong & Jeffrey D. Kubik & Jeremy C. Stein, 2005. "Thy Neighbor's Portfolio: Word‐of‐Mouth Effects in the Holdings and Trades of Money Managers," Journal of Finance, American Finance Association, vol. 60(6), pages 2801-2824, December.
    7. Callois, Jean-Marc, 2013. "Social interaction and economic organization: Toward an integrative microeconomic model," Economics Letters, Elsevier, vol. 121(1), pages 98-100.
    8. Libman, Alexander & Obydenkova, Anastassia, 2013. "Communism or communists? Soviet legacies and corruption in transition economies," Economics Letters, Elsevier, vol. 119(1), pages 101-103.
    9. Russo, Francesco Flaviano, 2013. "Tax morale and tax evasion reports," Economics Letters, Elsevier, vol. 121(1), pages 110-114.
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    Cited by:

    1. Tabea Bucher†Koenen & Bettina Lamla†Dietrich, 2018. "The Long Shadow of Socialism: Puzzling Evidence on East†West German Differences in Financial Literacy," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 47(2-3), pages 413-438, July.

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    More about this item

    Keywords

    Social networks; Portfolio choice; Split-population duration model; German reunification;
    All these keywords.

    JEL classification:

    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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