Proposal preview

The Webs of Shadow. Financial networks during the First Globalization

The importance of networks in allowing the rise and expansion of the first wave of globalization (1870-1913) has been recognized in the literature at several levels. The conquest of distance was possible thanks to increasingly redundant networks of transportation (railways, shipping lines) and communication (mail and telegraph). Likewise, the large migratory waves of the period built on the ‘networks of friends and family’, which shared information about host countries and helped funding the passage of new migrants. Finally, the dramatic rise in financial flows in the later quarter of the 19h century required innovative technologies to acquire information and pool risk across industries and continents. Many of these were based on networks, such as news agencies, credit ratings agencies, currency trading, multinational banks and banking syndicates. Without all of these the twin forces of specialization and agglomeration would not be possible to the extent they reached on the eve of World War One.
Less appreciated in the literature is the fact that networks generate externalities, which can influence behaviour in ways that are difficult to capture in models that assume agents act independently from each other. To be sure, this has been recognized in a few contexts (López-Córdova and Meissner 2003 on exchange rate regimes and Flandreau and Jobst 2009 on currency networks), but a lot remains to be done. A particular source of interest in these externalities is their influence on policy, with regards to trade, financial openness and even political regimes. This session contributes to a budding literature that explicitly models financial links as part of a network of interdependent relations where, e.g. the decision of bank A to fund company 1 depends on the relations between all banks and companies already in the network. This setting raises a threat to identification in classical regression analysis, but recent methodological developments in the field of dynamic network models are a promising framework to study to address it.
This session currently has 5 papers and 8 authors confirmed. Three of the papers examine the period of increased integration prior to World War I, whereas the other two focus on the negative network externalities during the disintegration drive in the interwar.

The session is now full and we are no longer accepting new papers.

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List of papers/ contibutors:

Accominoti, Olivier (LSE) and Stefano Ugolini (Toulouse) “A Network Analysis of the International Financial System During the First Globalization”
Esteves, Rui (Oxford) and Florian Ploeckl (Adelaide) “Gold and Trade: An empirical simulation approach”
Markus Lampe (WU Wien) and Florian Ploeckl (Adelaide) “International Money Orders during First Globalization and the Interwar period”
Ling-Yu Kong (Adelaide) “Interbank Network and Political Connections during the Period of the Chinese Republic in the 1930s”
Merrett, David (Melbourne) and Laura Panza (Melbourne), “Cross-border banking services in the 1930s: Branches versus Correspondents”


  • Rui Esteves, University of Oxford,,
  • Florian Ploeckl, University of Adelaide,,

Session members

  • Olivier Accominotti, LSE,
  • Stefano Ugolini, Univ Toulouse - Capitole,
  • Markus Lampe, WU Vienna,
  • Ling-Yu Kong, University of Adelaide,
  • David Merrett, University of Melbourne,
  • Laura Panza, University of Melbourne,
  • Emily Tang, LSE,
  • D'Maris Coffman, UCL,
  • John Landon Lane, Rutgers,
  • Ali Kabiri, Buckingham,
  • Michael Bordo, Rutgers,
  • Antoine Parent, Sciences-PO,
  • Marc Weidenmier, Claremont McKenna,
  • Cécile Bastidon, Toulon,

Proposed discussant(s)

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