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The network structure of city-firm relations

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  • Antonios Garas
  • Celine Rozenblat
  • Frank Schweitzer

Abstract

How are economic activities linked to geographic locations? To answer this question, we use a data-driven approach that builds on the information about location, ownership and economic activities of the world's 3,000 largest firms and their almost one million subsidiaries. From this information we generate a bipartite network of cities linked to economic activities. Analysing the structure of this network, we find striking similarities with nested networks observed in ecology, where links represent mutualistic interactions between species. This motivates us to apply ecological indicators to identify the unbalanced deployment of economic activities. Such deployment can lead to an over-representation of specific economic sectors in a given city, and poses a significant thread for the city's future especially in times when the over-represented activities face economic uncertainties. If we compare our analysis with external rankings about the quality of life in a city, we find that the nested structure of the city-firm network also reflects such information about the quality of life, which can usually be assessed only via dedicated survey-based indicators.

Suggested Citation

  • Antonios Garas & Celine Rozenblat & Frank Schweitzer, 2015. "The network structure of city-firm relations," Papers 1512.02859, arXiv.org.
    • Handle: RePEc:arx:papers:1512.02859
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    References listed on IDEAS

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    1. Sebastián Bustos & Charles Gomez & Ricardo Hausmann & César A Hidalgo, 2012. "The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems," PLOS ONE, Public Library of Science, vol. 7(11), pages 1-8, November.
    2. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
    3. Serguei Saavedra & Daniel B. Stouffer & Brian Uzzi & Jordi Bascompte, 2011. "Strong contributors to network persistence are the most vulnerable to extinction," Nature, Nature, vol. 478(7368), pages 233-235, October.
    4. Tobias Scholl & Antonios Garas & Frank Schweitzer, 2015. "The spatial component of R&D networks," Papers 1509.08291, arXiv.org.
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    Cited by:

    1. Abhijit Chakraborty & Hiroyasu Inoue & Yoshi Fujiwara, 2020. "Economic complexity of prefectures in Japan," PLOS ONE, Public Library of Science, vol. 15(8), pages 1-13, August.
    2. Abhijit Chakraborty & Hiroyasu Inoue & Yoshi Fujiwara, 2020. "Economic complexity of prefectures in Japan," Papers 2002.05785, arXiv.org, revised Aug 2020.

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