Sparse production networks

Andrew Bernard and Yuan Zi

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Firm-to-firm connections in domestic and international production networks play a fundamental role in economic outcomes. Firm heterogeneity and the sparse nature of firm-to-firm connections implicitly discipline network structure. We find that a large group of well-established statistical relationships are not useful in improving our understanding of production networks. We propose an "elementary" model for production networks based on random matching and firm heterogeneity and characterize the families of statistics and data generating processes that may raise underidentification concerns in more complex models. The elementary model is a useful benchmark in developing "instructive" statistics and informing model construction and selection.

Keywords: firm-to-firm networks; model selection; balls-and-bins; buyer-seller matching; underidentification (search for similar items in EconPapers)
JEL-codes: F11 F14 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2022-10-17
New Economics Papers: this item is included in nep-bec, nep-net and nep-ure
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http://eprints.lse.ac.uk/118004/ Open access version. (application/pdf)

Related works:
Working Paper: Sparse production networks (2022)
Working Paper: Sparse Production Networks (2022)
Working Paper: Sparse Production Networks (2022)
Working Paper: Sparse Production Networks (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:118004

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