The Structure and Evolution of Buyer-Supplier Networks
In this paper, we investigate the structure and evolution of customer-supplier networks in Japan using a unique dataset that contains information on customer and supplier linkages for more than 500,000 incorporated non-financial firms for the five years from 2008 to 2012. We find, first, that the number of customer links is unequal across firms; the customer link distribution has a power-law tail with an exponent of unity (i.e., it follows Zipfâ€™s law). We interpret this as implying that competition among firms to acquire new customers yields winners with a large number of customers, as well as losers with fewer customers. We also show that the shortest path length for any pair of firms is, on average, 4.3 links. Second, we find that link switching is relatively rare. Our estimates indicate that the survival rate per year for customer links is 92 percent and for supplier links 93 percent. Third and finally, we find that firm growth rates tend to be more highly correlated the closer two firms are to each other in a customer-supplier network (i.e., the smaller is the shortest path length for the two firms). This suggests that a non-negligible portion of fluctuations in firm growth stems from the propagation of microeconomic shocks â€“ shocks affecting only a particular firm â€“ through customer-supplier chains.
|Date of creation:||Jan 2014|
|Date of revision:|
|Contact details of provider:|| Postal: Hongo 7-3-1, Bunkyo-ku, Tokyo 113-0033|
Web page: http://www.carf.e.u-tokyo.ac.jp/english/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daron Acemoglu & Vasco Carvalho & Asuman Ozdaglar & Alireza Tahbaz-Salehi, 2011.
"The network origins of aggregate fluctuations,"
Economics Working Papers
1291, Department of Economics and Business, Universitat Pompeu Fabra.
- Daron Acemoglu & Vasco Carvalho & Asuman Ozdaglar & Alireza Tahbaz-Salehi, 2011. "The Network Origins of Aggregate Fluctuations," Working Papers 587, Barcelona Graduate School of Economics.
- Daron Acemoglu & Vasco M. Carvalho & Asuman E. Ozdaglar & Alireza Tahbaz-Salehi, 2012. "The Network Origins of Aggregate Fluctuations," Levine's Working Paper Archive 786969000000000359, David K. Levine.
- Julian di Giovanni & Andrei A. Levchenko, 2010.
"Putting the Parts Together: Trade, Vertical Linkages, and Business Cycle Comovement,"
American Economic Journal: Macroeconomics,
American Economic Association, vol. 2(2), pages 95-124, April.
- Julian di Giovanni & Andrei A. Levchenko, 2008. "Putting the Parts Together: Trade, Vertical Linkages, and Business Cycle Comovement," Working Papers 580, Research Seminar in International Economics, University of Michigan.
- Andrei A. Levchenko & Julian Di Giovanni, 2009. "Putting the Parts Together; Trade, Vertical Linkages, and Business Cycle Comovement," IMF Working Papers 09/181, International Monetary Fund.
- Vasco M Carvalho, 2008.
"Aggregate Fluctuations and the Network Structure of Intersectoral Trade,"
2008 Meeting Papers
1062, Society for Economic Dynamics.
- Vasco Carvalho, 2007. "Aggregate fluctuations and the network structure of intersectoral trade," Economics Working Papers 1206, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2010.
- Bryan Kelly & Hanno Lustig & Stijn Van Nieuwerburgh, 2013.
"Firm Volatility in Granular Networks,"
NBER Working Papers
19466, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Asuman E. Ozdaglar & Alireza Tahbaz-Salehi, 2014.
"The Network Origins of Large Economic Downturns,"
Levine's Working Paper Archive
786969000000000944, David K. Levine.
- Leena Rudanko & Francois Gourio, 2010.
2010 Meeting Papers
121, Society for Economic Dynamics.
- Daron Acemoglu & Asuman Ozdaglar & Alireza Tahbaz-Salehi, 2013.
"Systemic Risk and Stability in Financial Networks,"
NBER Working Papers
18727, National Bureau of Economic Research, Inc.
- Andrew T. Foerster & Pierre-Daniel G. Sarte & Mark W. Watson, 2011. "Sectoral versus Aggregate Shocks: A Structural Factor Analysis of Industrial Production," Journal of Political Economy, University of Chicago Press, vol. 119(1), pages 1 - 38.
- Battiston, Stefano & Delli Gatti, Domenico & Gallegati, Mauro & Greenwald, Bruce & Stiglitz, Joseph E., 2007. "Credit chains and bankruptcy propagation in production networks," Journal of Economic Dynamics and Control, Elsevier, vol. 31(6), pages 2061-2084, June.
- Stella, Andrea, 2015.
"Firm dynamics and the origins of aggregate fluctuations,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 55(C), pages 71-88.
- Stella, Andrea, 2015. "Firm Dynamics and the Origins of Aggregate Fluctuations," International Finance Discussion Papers 1133, Board of Governors of the Federal Reserve System (U.S.).
- 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.
- Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-21, September.
- SAITO (UMENO) Yukiko & WATANABE Tsutomu & IWAMURA Mitsuru, 2007.
"Do Larger Firms Have More Interfirm Relationships?,"
07028, Research Institute of Economy, Trade and Industry (RIETI).
- 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.
When requesting a correction, please mention this item's handle: RePEc:cfi:fseres:cf339. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.