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Do larger firms have more interfirm relationships?

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Author Info

  • Saito, Yukiko Umeno
  • Watanabe, Tsutomu
  • Iwamura, Mitsuru

Abstract

In this study, we investigate interfirm networks by employing a unique data set containing information on more than 800,000 Japanese firms, about half of all corporate firms currently operating in Japan. First, we find that the number of relationships, measured by the indegree, has a fat-tail distribution, implying that there exist “hub” firms with a large number of relationships. Moreover, the indegree distribution for those hub firms also exhibits a fat tail, suggesting the existence of “super-hub” firms. Second, we find that larger firms tend to have more counterparts, but the relationship between firms’ size and the number of their counterparts is not necessarily proportional; firms that already have a large number of counterparts tend to grow without proportionately expanding it.

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File URL: http://www.sciencedirect.com/science/article/pii/S0378437107005110
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Bibliographic Info

Article provided by Elsevier in its journal Physica A: Statistical Mechanics and its Applications.

Volume (Year): 383 (2007)
Issue (Month): 1 ()
Pages: 158-163

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Handle: RePEc:eee:phsmap:v:383:y:2007:i:1:p:158-163

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Web page: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/

Related research

Keywords: Network structure; Interfirm relationships; Hub firms; Firm size; Fat-tail distributions;

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References

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  1. Enrica Detragiache & Paolo Garella & Luigi Guiso, 2000. "Multiple versus Single Banking Relationships: Theory and Evidence," Journal of Finance, American Finance Association, vol. 55(3), pages 1133-1161, 06.
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Citations

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Cited by:
  1. Mizuno, Takayuki & Souma, Wataru & Watanabe, Tsutomu, 2014. "The Structure and Evolution of Buyer-Supplier Networks," Working Paper Series 27, Center for Interfirm Network, Institute of Economic Research, Hitotsubashi University.
  2. Konno, Tomohiko, 2009. "Network structure of Japanese firms. Scale-free, hierarchy, and degree correlation: analysis from 800,000 firms," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 3(31), pages 1-13.
  3. Takayuki Mizuno & Wataru Souma & Tsutomu Watanabe, 2014. "The Structure and Evolution of Buyer-Supplier Networks," CARF F-Series CARF-F-339, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
  4. Taleb, Nassim N. & Tapiero, Charles S., 2010. "Risk externalities and too big to fail," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(17), pages 3503-3507.
  5. Watanabe, Hayafumi & Takayasu, Hideki & Takayasu, Misako, 2013. "Relations between allometric scalings and fluctuations in complex systems: The case of Japanese firms," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(4), pages 741-756.
  6. Estrada, Fernando, 2009. "Tamaño y Riesgo en los Mercados Financieros
    [Size and Risk in the Finanzal Markets]
    ," MPRA Paper 19267, University Library of Munich, Germany.
  7. Takaaki Ohnishi & Hideki Takayasu & Misako Takayasu, 2010. "Network motifs in an inter-firm network," Journal of Economic Interaction and Coordination, Springer, vol. 5(2), pages 171-180, December.
  8. SAITO Yukiko, 2013. "Role of Hub Firms in Geographical Transaction Network," Discussion papers 13080, Research Institute of Economy, Trade and Industry (RIETI).
  9. Konno, Tomohiko, 2008. "Network Structure of Japanese Firms Hierarchy and Degree Correlation: Analysis from 800,000 Firms," Economics Discussion Papers 2008-39, Kiel Institute for the World Economy.
  10. Estrada, Fernando, 2011. "Theory of financial risk," MPRA Paper 29665, University Library of Munich, Germany.

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