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Large-scale structure of a nation-wide production network

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  • Y. Fujiwara

    ()

  • H. Aoyama

Abstract

Production in an economy is a set of firms’ activities as suppliers and customers; a firm buys goods from other firms, puts value added and sells products to others in a giant network of production. Empirical study is lacking despite the fact that the structure of the production network is important to understand and make models for many aspects of dynamics in economy. We study a nation-wide production network comprising a million firms and millions of supplier-customer links by using recent statistical methods developed in physics. We show in the empirical analysis scale-free degree distribution, disassortativity, correlation of degree to firm-size, and community structure having sectoral and regional modules. Since suppliers usually provide credit to their customers, who supply it to theirs in turn, each link is actually a creditor-debtor relationship. We also study chains of failures or bankruptcies that take place along those links in the network, and corresponding avalanche-size distribution. Copyright EDP Sciences, SIF, Springer-Verlag Berlin Heidelberg 2010

Suggested Citation

  • Y. Fujiwara & H. Aoyama, 2010. "Large-scale structure of a nation-wide production network," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 77(4), pages 565-580, October.
  • Handle: RePEc:spr:eurphb:v:77:y:2010:i:4:p:565-580
    DOI: 10.1140/epjb/e2010-00275-2
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    Citations

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    Cited by:

    1. Salvador Pueyo, 2013. "Is it a power law distribution? The case of economic contractions," Papers 1310.2567, arXiv.org.
    2. Atushi Ishikawa & Shouji Fujimoto & Takayuki Mizuno & Tsutomu Watanabe, 2014. "Analytical Derivation of Power Laws in Firm Size Variables from Gibrat’s Law and Quasi-inversion Symmetry: A Geomorphological Approach," UTokyo Price Project Working Paper Series 019, University of Tokyo, Graduate School of Economics.
    3. 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.
    4. MIZUNO Takayuki & SOUMA Wataru & WATANABE Tsutomu, 2015. "Buyer-Supplier Networks and Aggregate Volatility," Discussion papers 15056, Research Institute of Economy, Trade and Industry (RIETI).
    5. Takayuki Mizuno & Wataru Souma & Tsutomu Watanabe, 2014. "Buyer-Supplier Networks and Aggregate Volatility," UTokyo Price Project Working Paper Series 033, University of Tokyo, Graduate School of Economics.
    6. Takayuki Mizuno & Wataru Souma & Tsutomu Watanabe, 2014. "Buyer-Supplier Networks and Aggregate Volatility," CARF F-Series CARF-F-353, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    7. Mizuno, Takayuki & Ohnishi, Takaaki & Watanabe, Tsutomu, 2016. "The structure of global inter-firm networks," HIT-REFINED Working Paper Series 37, Institute of Economic Research, Hitotsubashi University.
    8. FUJIWARA Yoshi & TERAI Masaaki & FUJITA Yuji & SOUMA Wataru, 2016. "DebtRank Analysis of Financial Distress Propagation on a Production Network in Japan," Discussion papers 16046, Research Institute of Economy, Trade and Industry (RIETI).
    9. Henriet, Fanny & Hallegatte, Stéphane & Tabourier, Lionel, 2012. "Firm-network characteristics and economic robustness to natural disasters," Journal of Economic Dynamics and Control, Elsevier, vol. 36(1), pages 150-167.
    10. Takayuki Mizuno & Takaaki Ohnishi & Tsutomu Watanabe, 2015. "Structure of global buyer-supplier networks and its implications for conflict minerals regulations," Papers 1505.02274, arXiv.org.
    11. Inoue, Hiroyasu & Todo, Yasuyuki, 2017. "Firm-level simulation of supply chain disruption triggered by actual and predicted earthquakes," MPRA Paper 82920, University Library of Munich, Germany, revised 22 Feb 2017.
    12. Salvador Pueyo, 2014. "Ecological Econophysics for Degrowth," Sustainability, MDPI, Open Access Journal, vol. 6(6), pages 1-53, May.
    13. Yasuyuki Todo & Kentaro Nakajima & Petr Matous, 2015. "How Do Supply Chain Networks Affect The Resilience Of Firms To Natural Disasters? Evidence From The Great East Japan Earthquake," Journal of Regional Science, Wiley Blackwell, vol. 55(2), pages 209-229, March.
    14. Charles D. Brummitt & Kenan Huremovic & Paolo Pin & Matthew H. Bonds & Fernando Vega-Redondo, 2017. "Contagious disruptions and complexity traps in economic development," Papers 1707.05914, arXiv.org.
    15. Takayuki Mizuno & Takaaki Ohnishi & Tsutomu Watanabe, 2015. "Structure of global buyer-supplier networks and its implications for conflict minerals regulations," UTokyo Price Project Working Paper Series 053, University of Tokyo, Graduate School of Economics.
    16. Takayuki Mizuno & Takaaki Ohnishi & Tsutomu Watanabe, 2015. "Structure of global buyer-supplier networks and its implications for conflict minerals regulations," CARF F-Series CARF-F-362, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    17. 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.

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