PONE-D-23-35741Change in hierarchy of the financial networks: A study on firms of an emerging market in BangladeshPLOS ONE

Dear Dr. Nobi,

Thank you for submitting your manuscript to PLOS ONE. After careful consideration, we feel that it has merit but does not fully meet PLOS ONE’s publication criteria as it currently stands. Therefore, we invite you to submit a revised version of the manuscript that addresses the points raised during the review process.

Please carefully read the reviewers' comments.

Please submit your revised manuscript by Feb 16 2024 11:59PM. If you will need more time than this to complete your revisions, please reply to this message or contact the journal office at plosone@plos.org. When you're ready to submit your revision, log on to https://www.editorialmanager.com/pone/ and select the 'Submissions Needing Revision' folder to locate your manuscript file.

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We look forward to receiving your revised manuscript.

Kind regards,

Dariusz Siudak, Ph.D., DSc.

Academic Editor

PLOS ONE

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3. Thank you for stating the following financial disclosure: 

"This research was supported by the ICT Division of Bangladesh [The grant number is 19FS32950]."

  

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Additional Editor Comments:

1. It seems that either formula (2) is incorrect or has been entered incorrectly.

2. A chart for the DSE stock index for the same period should be presented in Fig. 1 or separately.

3. It is hard to agree with the presented conclusions on page 17 (lines 337-380). The COVID-19 pandemic originated in December 2019 in China. Did the financial market in Bangladesh anticipate the negative impact of COVID-19 on its functioning? Or is it, however, the result of other macroeconomic factors, including systematic risk? The COVID-19 pandemic is considered a Black Swan event in the financial market, a completely unpredictable occurrence with broad implications for financial markets. In my opinion, this passage should be reformulated, attempting to find alternative explanations for changes in the Hierarchy coefficient.

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Reviewers' comments:

Reviewer's Responses to Questions

Comments to the Author

1. Is the manuscript technically sound, and do the data support the conclusions?

The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented.

Reviewer #1: Yes

Reviewer #2: No

Reviewer #3: Partly

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2. Has the statistical analysis been performed appropriately and rigorously?

Reviewer #1: Yes

Reviewer #2: No

Reviewer #3: Yes

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3. Have the authors made all data underlying the findings in their manuscript fully available?

The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified.

Reviewer #1: Yes

Reviewer #2: Yes

Reviewer #3: No

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4. Is the manuscript presented in an intelligible fashion and written in standard English?

PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here.

Reviewer #1: Yes

Reviewer #2: No

Reviewer #3: No

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5. Review Comments to the Author

Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters)

Reviewer #1: Recommendation: Major Revision

This paper investigates the hierarchical structure of Dhaka stocks’ financial networks. However, the execution is lacking number of fundamental issues.

� What are your contributions? Better highlight novelty in the study. Better define motivations for the research.

� Page 3, line 14. As far as I know, the Chinese stock market is still an emerging market compared to the U.S. Please ensure the expression is appropriate.

� Introduction - Lack of appropriate critical appraisal of included studies to find current research gaps.

� The choice of MST needs to be motivated. The authors merely list alternative models, such as random matrix theory, wavelet method, principal component analysis, and GARCH method. Instead, they should present a comprehensive summary of the advantages and disadvantages of each method.

� PMFG preserves the same hierarchical structure as MST but offers more significant and richer information. Thus, the question arises: Why would one choose to utilize MST over PMFG. I suggest the author read this paper:

Di Matteo, T., Pozzi, F., & Aste, T. (2010). The use of dynamical networks to detect the hierarchical organization of financial market sectors. The European Physical Journal B, 73, 3-11.

� The last waves of COVID-19 and the Russia-Ukraine conflict are two essential events for financial stability. The authors should cover these periods.

� The DSE, such abbreviations, must be defined at their first mention there.

� Line 289. The hub and the peripheral are measured by which of the centralities? The author should also show the hub ranking of all assets.

� In Fig.1. The author should elaborate on why the peripheral company, AB Bank Limited, fell sharply in 2012, and Advance Chemical Industries Limited had a different trend compared to the other three companies during 2010 and 2011.

� Figs. 4-7. The authors should supplement the U.S. market in figures as a contrast.

� The conclusion section seems to rush to the end. The authors will have to demonstrate the impact and insights of the research. Clearly state your unique research contributions in the conclusion section.

Reviewer #2: Emerging markets are interesting, and network analysis can be useful for analyzing them. However, I don't believe that the article is in good shape for publication. The authors should restructure the article, avoiding redundancies and focusing more on results and analyses. The article contains a lot of information that obscures the central theme of the research.

Additionally, some statistical analyses deserve more attention. For me, it is not surprising that the distribution of sample correlations deviates from the Gaussian distribution.

I suggest the authors should consider revisiting the article's organization to avoid redundancies and provide a cohesive and easy-to-follow narrative."

Reviewer #3: The authors analyzed the Bangladesh stock market from the perspective of network hierarchy using the MST methodology. The overall structure of the paper is appropriate. However, it is necessary to reflect the following modifications.

1. Analyzing the Bangladesh stock market is meaningful for the local economy. However, from a global perspective, the importance of the Bangladesh stock market is relatively low compared to countries such as the United States, China, and Japan, for example. Therefore, the authors need to convince people of the implications of analyzing the Bangladesh stock market for financial markets around the world.

2. Why was the MST methodology used? What can we gain from analyzing the hierarchy of a network?

3. Why was normalized log-return used in equation (1)?

4. Explain equation (2) in more detail.

5. The format of the pictures does not match the journal, and the clarity is poor.

6. “which is useful in forecasting any upcoming big crisis” => Is it possible to predict risks? If possible, further explanation and analysis is needed to determine how possible this is.

7. "We find that the network hub and central nodes with a maximum degree and BC measure are mainly financial companies, more specifically the insurance companies, i.e., they play important roles in the Bangladeshi market." => What is the reason for these results? Or what do you think?

8. “We need analyzes on other emerging markets like Egypt, Thailand, Indonesia, etc., which will be left for further investigation.” => Please cite related existing literature.

9. “Which can be important to the respective authorities, investors, and policymakers for risk management and portfolio investment.” => Please provide more specific implications.

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Reviewer #1: No

Reviewer #2: No

Reviewer #3: No

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PONE-D-23-35741R1Change in hierarchy of the financial networks: A study on firms of an emerging market in BangladeshPLOS ONE

Dear Dr. Nobi,

Thank you for submitting your manuscript to PLOS ONE. After careful consideration, we feel that it has merit but does not fully meet PLOS ONE’s publication criteria as it currently stands. Therefore, we invite you to submit a revised version of the manuscript that addresses the points raised during the review process.

Please submit your revised manuscript by Apr 14 2024 11:59PM. If you will need more time than this to complete your revisions, please reply to this message or contact the journal office at plosone@plos.org. When you're ready to submit your revision, log on to https://www.editorialmanager.com/pone/ and select the 'Submissions Needing Revision' folder to locate your manuscript file.

Please include the following items when submitting your revised manuscript:

• A rebuttal letter that responds to each point raised by the academic editor and reviewer(s). You should upload this letter as a separate file labeled 'Response to Reviewers'.
• A marked-up copy of your manuscript that highlights changes made to the original version. You should upload this as a separate file labeled 'Revised Manuscript with Track Changes'.
• An unmarked version of your revised paper without tracked changes. You should upload this as a separate file labeled 'Manuscript'.

If you would like to make changes to your financial disclosure, please include your updated statement in your cover letter. Guidelines for resubmitting your figure files are available below the reviewer comments at the end of this letter.

If applicable, we recommend that you deposit your laboratory protocols in protocols.io to enhance the reproducibility of your results. Protocols.io assigns your protocol its own identifier (DOI) so that it can be cited independently in the future. For instructions see: https://journals.plos.org/plosone/s/submission-guidelines#loc-laboratory-protocols. Additionally, PLOS ONE offers an option for publishing peer-reviewed Lab Protocol articles, which describe protocols hosted on protocols.io. Read more information on sharing protocols at https://plos.org/protocols?utm_medium=editorial-email&utm_source=authorletters&utm_campaign=protocols.

We look forward to receiving your revised manuscript.

Kind regards,

Dariusz Siudak, Ph.D., DSc.

Academic Editor

PLOS ONE

Journal Requirements:

Please review your reference list to ensure that it is complete and correct. If you have cited papers that have been retracted, please include the rationale for doing so in the manuscript text, or remove these references and replace them with relevant current references. Any changes to the reference list should be mentioned in the rebuttal letter that accompanies your revised manuscript. If you need to cite a retracted article, indicate the article’s retracted status in the References list and also include a citation and full reference for the retraction notice.

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Reviewers' comments:

Reviewer's Responses to Questions

Comments to the Author

1. If the authors have adequately addressed your comments raised in a previous round of review and you feel that this manuscript is now acceptable for publication, you may indicate that here to bypass the “Comments to the Author” section, enter your conflict of interest statement in the “Confidential to Editor” section, and submit your "Accept" recommendation.

Reviewer #1: All comments have been addressed

Reviewer #2: All comments have been addressed

Reviewer #3: (No Response)

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2. Is the manuscript technically sound, and do the data support the conclusions?

The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented.

Reviewer #1: (No Response)

Reviewer #2: Yes

Reviewer #3: (No Response)

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3. Has the statistical analysis been performed appropriately and rigorously?

Reviewer #1: Yes

Reviewer #2: Yes

Reviewer #3: (No Response)

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4. Have the authors made all data underlying the findings in their manuscript fully available?

The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified.

Reviewer #1: Yes

Reviewer #2: Yes

Reviewer #3: (No Response)

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5. Is the manuscript presented in an intelligible fashion and written in standard English?

PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here.

Reviewer #1: Yes

Reviewer #2: Yes

Reviewer #3: (No Response)

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6. Review Comments to the Author

Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters)

Reviewer #1: (No Response)

Reviewer #2: The authors have made revisions following the recommendations of the reviewers. It appears more suitable for publication now.

Suggestion to the authors

In the introduction: “The topological...US and China [3] “ ----> “ In particular, the topological...US and China [3]”.

Reviewer #3: Query 7: "We find that the network hub and central nodes with a maximum degree and BC measure are mainly financial companies, more specifically the insurance companies, i.e., they play important roles in the Bangladeshi market." => What is the reason for these results? Or what do you think?

Response: The insurance sector plays a vital role in the Bangladeshi market. According to PwC [8], the insurance sector has the potential to make a positive contribution to the overall standard of living of the country's populace. The sector can help reduce the burden on the overall spending on healthcare. The insurance sector can also help manage risks in an economy at a micro level, safeguarding households and companies from a myriad of risks [8].

Please include the response for the Q7 longer in the manuscript. Other modifications are satisfied.

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7. PLOS authors have the option to publish the peer review history of their article (what does this mean?). If published, this will include your full peer review and any attached files.

If you choose “no”, your identity will remain anonymous but your review may still be made public.

Do you want your identity to be public for this peer review? For information about this choice, including consent withdrawal, please see our Privacy Policy.

Reviewer #1: Yes: Longfeng Zhao

Reviewer #2: No

Reviewer #3: No

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[NOTE: If reviewer comments were submitted as an attachment file, they will be attached to this email and accessible via the submission site. Please log into your account, locate the manuscript record, and check for the action link "View Attachments". If this link does not appear, there are no attachment files.]

While revising your submission, please upload your figure files to the Preflight Analysis and Conversion Engine (PACE) digital diagnostic tool, https://pacev2.apexcovantage.com/. PACE helps ensure that figures meet PLOS requirements. To use PACE, you must first register as a user. Registration is free. Then, login and navigate to the UPLOAD tab, where you will find detailed instructions on how to use the tool. If you encounter any issues or have any questions when using PACE, please email PLOS at figures@plos.org. Please note that Supporting Information files do not need this step.

Change in hierarchy of the financial networks: A study on firms of an emerging market in Bangladesh

PONE-D-23-35741R2

Dear Dr. Nobi,

We’re pleased to inform you that your manuscript has been judged scientifically suitable for publication and will be formally accepted for publication once it meets all outstanding technical requirements.

Within one week, you’ll receive an e-mail detailing the required amendments. When these have been addressed, you’ll receive a formal acceptance letter and your manuscript will be scheduled for publication.

An invoice will be generated when your article is formally accepted. Please note, if your institution has a publishing partnership with PLOS and your article meets the relevant criteria, all or part of your publication costs will be covered. Please make sure your user information is up-to-date by logging into Editorial Manager at Editorial Manager® and clicking the ‘Update My Information' link at the top of the page. If you have any questions relating to publication charges, please contact our Author Billing department directly at authorbilling@plos.org.

If your institution or institutions have a press office, please notify them about your upcoming paper to help maximize its impact. If they’ll be preparing press materials, please inform our press team as soon as possible -- no later than 48 hours after receiving the formal acceptance. Your manuscript will remain under strict press embargo until 2 pm Eastern Time on the date of publication. For more information, please contact onepress@plos.org.

Kind regards,

Dariusz Siudak, Ph.D., DSc.

Academic Editor

PLOS ONE

Additional Editor Comments (optional):

Reviewers' comments:

Reviewer's Responses to Questions

Comments to the Author

1. If the authors have adequately addressed your comments raised in a previous round of review and you feel that this manuscript is now acceptable for publication, you may indicate that here to bypass the “Comments to the Author” section, enter your conflict of interest statement in the “Confidential to Editor” section, and submit your "Accept" recommendation.

Reviewer #2: All comments have been addressed

Reviewer #3: All comments have been addressed

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2. Is the manuscript technically sound, and do the data support the conclusions?

The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented.

Reviewer #2: Yes

Reviewer #3: Yes

**********

3. Has the statistical analysis been performed appropriately and rigorously?

Reviewer #2: Yes

Reviewer #3: Yes

**********

4. Have the authors made all data underlying the findings in their manuscript fully available?

The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified.

Reviewer #2: Yes

Reviewer #3: Yes

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5. Is the manuscript presented in an intelligible fashion and written in standard English?

PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here.

Reviewer #2: Yes

Reviewer #3: Yes

**********

6. Review Comments to the Author

Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters)

Reviewer #2: In my opinion the authors have adequately addressed all comments raised by the reviewers.

In the current version I suggest publishing the article.

Reviewer #3: I have confirmed the revision and am satisfied. I would like to thank the author for his hard work..

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7. PLOS authors have the option to publish the peer review history of their article (what does this mean?). If published, this will include your full peer review and any attached files.

If you choose “no”, your identity will remain anonymous but your review may still be made public.

Do you want your identity to be public for this peer review? For information about this choice, including consent withdrawal, please see our Privacy Policy.

Reviewer #2: No

Reviewer #3: No

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