Describing the effect of influential spreaders on the different sectors of Indian market: a complex networks perspective

TL;DR

This paper introduces a novel network-based measure called LIEST to identify influential market sectors in India, distinguishing positive and negative influences during different economic periods, especially crises.

Contribution

The paper proposes the LIEST measure, which effectively captures sector influences separately, addressing limitations of existing centrality measures in complex market networks.

Findings

LIEST successfully differentiates positive and negative sector influences.

The analysis reveals dynamic shifts in influential sectors across different periods.

The method enhances understanding of sector interactions during crises.

Abstract

Market competition has a role which is directly or indirectly associated with influential effects of individual sectors on other sectors of the economy. The present work studies the relative position of a product in the market through the identification of influential spreaders and its corresponding effect on the other sectors of the market using complex network analysis during the pre-, in-, and post-crisis induced lockdown periods using daily data of NSE from December, 2019 to June, 2021. The existing approaches using different centrality measures failed to distinguish between the positive and negative influences of the different sectors in the market which act as spreaders. To obviate this problem, this paper presents an effective measure called LIEST (Local Influential Effects for Specific Target) that can examine the positive and negative influences separately with respect to any crisis period. LIEST considers the combined impact of all possible nodes which are at most three steps away from the specific targets for the networks. The essence of non-linearity in the network dynamics without considering single node effect becomes visible particularly in the proposed network.