Benjamin Wache

Submarine cables are a vital infrastructure of the global economy, carrying over 95% of intercontinental data, from financial transactions to AI applications. Yet they are also highly vulnerable to sabotage, espionage, and sanctions. This paper presents the first systematic effort to map and quantify dependence, vulnerability, and hegemonic dominance in global telecom networks over 150 years. We produce the CableHist dataset, covering all international undersea cables — telegraph, telephone, and internet — from 1850 to 2025, as well as all satellites in orbit. Using a network traffic model, we estimate countries' dependence on foreign cables and their exposure to disruption. We find that hegemonic powers have long dominated telecom networks and that they repeatedly weaponized this control. We also show that geopolitical tensions trigger strategic—but economically redundant—investments aimed at increasing security and independence. Finally, we conduct scenario analysis showing how vulnerable today's undersea cable system is, with risks being particularly high in the East China Sea, the Mediterranean Sea, and the Indian Ocean.

How does information impact the international allocation of capital? Using the global rollout of telegraph cables in the 19th century, I show causal evidence that reductions in information frictions had a significant and positive impact on the bilateral international flow of financial capital from the UK. The results indicate that the telegraph lead to more than a doubling of capital flows. For identification I use a geographic instrument, the ruggedness of the seabed. The effect of the telegraph was stronger for capital flows to businesses than to governments, and was significantly positive for flows to most industries. The telegraph had a direct and sizable impact on capital flows that was distinct from the increase in capital flows due to the telegraph's effect on trade. Using data from historical British newspapers, I show that the annual number of articles mentioning connected countries increased around the arrival of the telegraph. I interpret this as evidence that part of the mechanism through which the telegraph affected capital flows went through the news channel.

This paper examines the role of social connectedness in shaping cross-county venture capital (VC) investments. I study yearly county-to-county VC investments, and find a very large effect: a 1% increase in social connectedness is associated with a ~0.5% increase in VC investment. When controlling for social connectedness, physical distance becomes irrelevant as a determinant of VC flows. This result is robust to the addition of several bilateral controls (travel time, trade, commuting, migration). I find that early stage funding is more strongly impacted, and that counties with higher levels of social access to VC host more and better startups.