Dinger, V., Grundke, P. and Rohde, K. (2025) On the risk commonality of US tech firms: Relevance and determinants. Technological Forecasting and Social Change, 217. ISSN 0040-1625
Abstract
Technology firms serve as critical data and service intermediaries, which may pose new challenges to financial stability. We apply market-based systemic risk measures designed initially for financial firms to measure the risk commonality of tech firms included in the S&P 500 index. First, we find that, on average, the level of total risk commonality of tech firms is larger than for non-tech firms/non-banks. The difference between the level of risk commonality of tech firms and non-tech firms/non-banks increases over time. Second, we observe a high intra-group risk commonality for tech firms. Third, we find that the intra-group risk commonality of tech firms is driven to a larger extent by exposure to systematic risk factors than this is the case for banks. Fourth, in contrast, there is weak evidence that the inter-group risk commonality of tech firms is driven to a larger extent by non-systematic risk factors (e.g., direct business relationships) than this is the case for banks. Fifth, we hardly find balance-sheet or other firm-specific variables that are significantly associated with the level of total risk commonality of tech firms. Our results indicate that regulators should also look for risk accumulation outside the traditional financial world.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2025 The Authors. This is an open access article under the terms of the Creative Commons Attribution License (CC-BY 4.0), which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited. |
Keywords: | Digitalization; Risk commonality; Technological change; Banking |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 07 Jan 2025 17:45 |
Last Modified: | 18 Jun 2025 15:17 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.techfore.2024.123968 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:221379 |