Abstract
The energy sector occupies a mainstay role in overall growth in the modern worldwide economy. Therefore, it is essential to examine network structures and dynamics of leading energy companies of the world through complex network methods. Because, complex network methods are significant tools of studying the static and dynamics properties of the stock market, which allows us to better comprehend the stock market. We use daily prices of 147 energy stocks belonging to 34 countries of the world from 2006-2019. In addition to the overall sample, we explore networks for two sub-periods to examine the topological evolution during global recession of 2008, and energy and European debt crisis of 2011. Our results show substantial clustering of energy companies based on their geographic position during overall sample period. However, the crisis periods lead to a break in Asian and European clusters and only one prominent cluster appears in all the periods belonging to North American energy companies. We also observe few top US and European based companies occupying important and great global influence positions in the networks. In addition, time-varying topological measures indicate contraction of networks during crisis time, and an expansion in the recovery periods. More implications are also discussed.Keywords: energy companies; complex network; threshold network; minimum spanning tree; stock market; crisisJEL Classifications: C18; E32; E44; G01; G14; G15; G19DOI: https://doi.org/10.32479/ijeep.11287
Highlights
In today’s world, countries rely heavily on the consumption of energy to increase their industrial production and to boost their economic growth
We investigated network structures and dynamics of popular 147 energy stocks from 34 countries through properties and models of complex network theory
We present time varying statistical analysis of correlation coefficients, correlation threshold networks, the clustering structure of minimum spanning tree (MST), the centrality measures of MSTs, and importance of nodes and identification
Summary
In today’s world, countries rely heavily on the consumption of energy to increase their industrial production and to boost their economic growth. The EIA (US energy information administration) has projected a growth in the world energy consumption by 28% between 2015 and 20401. Globalization and expansion of economic activities resulted in optimum allocation of economic resources in the financial markets, it simultaneously encourages a rapid spread of financial crises that can topple the world financial system. Such as, the 2008 financial crisis, that shook the world economic and financial system within no time. Many studies attempt to analyze the impacts of financial crisis 2008 on stock market networks. Gong et al (2019) observed an increase in the network
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