Our paper on firm-level systemic risk in production networks is finally out in PNAS Nexus!
Together with Anna Mancini, Balázs Lengyel, and Giulio Cimini, we study how systemic risk evolves at the firm level in the Hungarian production network between 2015 and 2022 - a period that includes the COVID-19 shock. We benchmark the empirical network against a null model that randomizes supply links while preserving each firm's total input and output, so we can isolate what is really driven by the network structure rather than just by firm size.
What we find:
- The set of firms carrying the highest systemic risk changes shape during COVID-19: firms that facilitate economic exchanges become key players of the economy, a structural shift the null model does not reproduce.
- Before the pandemic, empirical systemic risk closely tracks the null model. Afterwards, it becomes significantly lower - evidence that firms adaptively rewired their supply links into a more resilient configuration.
- A firm's international trade volume becomes a significant predictor of its systemic risk during the crisis, but imports and exports pull in opposite directions through the supply and demand channels, so international linkages alone can't explain the full picture.
Mancini, A., Lengyel, B., Di Clemente, R., & Cimini, G. (2026). Evolution and determinants of firm-level systemic risk in local production networks. PNAS Nexus, 5(8), pgag233. https://doi.org/10.1093/pnasnexus/pgag233
This work also won Best Lightning Talk at NetSci 2026 earlier this year - great to now see the full peer-reviewed paper out.
You can also explore the paper interactively - click through the firm network, trace shock propagation upstream and downstream, and see how systemic risk shifted sector by sector during COVID: Systemic Risk Propagation in Firm Networks - interactive project page