Felix Gerding

Job Market Paper: 

Centrality, Risk, and Equity Returns Across Developed and Emerging Markets

I show that a country’s position in the global trade network (i.e., trade centrality) shapes how its financial markets load on global risk. In developed markets, greater trade centrality amplifies exposure to global shocks, whereas in emerging markets it dampens it. This divergence reflects different modes of trade integration. Emerging markets face extensive-margin frictions, so stronger ties within segmented blocs shift risk toward local shocks and lower global sensitivity. Developed markets are fully integrated at the extensive margin; for them, deeper trade on the intensive margin amplifies global exposure. To account for these patterns, I build a no-arbitrage model in which dividend growth combines local, global, and centrality-scaled components. Heterogeneous loadings on global volatility shocks generate opposite slopes across groups, matching the data and identifying trade-network structure as a driver of global risk transmission.

Publications: 

De-dollarization? Not so fast - Economics Letters, March 2024. with Jon Hartley

Working Papers:

The Risky Capital of Emerging Markets - with Espen Henriksen and Ina Simonovska - R&R AEJ Macro (2nd Round)

Work in Progress:

International beliefs network and currencies - with Riccardo Colacito, Max Croce and Alireza Moslemihaghighi

Global Returns to Capital - with Ina Simonovska

References

• Ina Simonovska (inasimonovska@ucdavis.edu)
• Mariano Massimiliano Croce(mariano.croce@unibocconi.it)
• Riccardo Colacito (riccardo_colacito@kenan-flager.unc.edu)

Contact

Bocconi University
Department of Finance,
Via G. Roentgen 1, 20136, Milan (Italy)
📧felix.gerding@googlemail.com