Original scientific paper
https://doi.org/10.1080/1331677X.2022.2092524
How network structure and exchange rate volatility drive the industrial ecosystem towards collapse: a global perspective
Wenqi Duan
Joseph David Madasi
Adnan Khurshid
Abstract
This study investigates the impact of topological structure and
exchange rate volatility on the collapse of industrial ecosystems.
To answer this question, we developed a multidimensional nonlinear
dynamic model that captures the dynamics of industrial
ecosystem structures. Furthermore, the formulated complex
model is reduced to a 1D model system without lowering its ability
to predict the tipping point (total collapse point). Using
1995–2015 input-output OECD data, the study was divided into
three phases (before, during, and after the global crisis) for empirical
testing. The results reveal that a more robust topological
structure is more resilient to economic shocks. Countries with
higher exchange rate volatilities are more vulnerable to global crises,
even though they have a strong topological structure to
resist risk. Furthermore, the upsurge in foreign direct investment
(FDI) enhances the robustness of the industrial structure and
reduces the exchange rate volatility risk. The results of this study
will help strengthen the robustness of the industrial structure of
the system to withstand both local and global perturbations
better.
Keywords
Exchange rate volatility; industrial collapse; economic resilience; tipping point; topology structure; hedging
Hrčak ID:
304185
URI
Publication date:
31.3.2023.
Visits: 428 *