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Do larger firms have more interfirm relationships?

Author

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  • 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.

Suggested Citation

  • Saito, Yukiko Umeno & Watanabe, Tsutomu & Iwamura, Mitsuru, 2007. "Do larger firms have more interfirm relationships?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 383(1), pages 158-163.
    • Handle: RePEc:eee:phsmap:v:383:y:2007:i:1:p:158-163
    DOI: 10.1016/j.physa.2007.04.097
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    References listed on IDEAS

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    1. Wataru Souma & Yoshi Fujiwara & Hideaki Aoyama, 2006. "Change of ownership networks in Japan," Springer Books, in: Hideki Takayasu (ed.), Practical Fruits of Econophysics, pages 307-311, Springer.
    2. 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, June.
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