Firms that are more central invest more in equilibrium. Central firms are exposed to larger idiosyncratic shocks that propagate in the production network. Their incentive to engage in precautionary saving is larger, leading to larger investment. In the data, I find support for this prediction,...

In this paper, we study the skewness risk and its return predictability in the energy market. Skewness risk is often used to measure the possibility of market crash. We study both physical skewness (market skewness and cross-sectional average realized skewness) estimated from underlying stock...