EconPapers    
Economics at your fingertips  
 

Geography and Firm Performance in the Japanese Production Network

Andrew Bernard, Andreas Moxnes and Yukiko Saito

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: Firms operate in complex supplier-customer networks that potentially range over long distances. However, the effects of supplier networks and supplier location on firm performance are largely unknown. This paper characterizes the domestic production network in Japan using detailed buyer-supplier data on over 950,000 firms. Beyond describing the characteristics of the Japanese production network, the paper examines the geographic features of the network links. Greater geographic distance plays an important role in reducing the probability of buyer-seller relations between pairs of firms. For a given firm, greater distance is associated with better performance measures of suppliers and customers. Geography, the density, and the quality of network connections are strongly correlated with downstream (customer) firm performance. Labor productivity, credit score, and size of a downstream firm are positively correlated with features of its upstream supply base including the number of suppliers and their average performance. In addition, geographic proximity of a firm's suppliers is associated with improved firm performance. The paper also provides the first evidence on the relationship between supplier network connections and downstream firm outcomes. Firm performance is better when its suppliers have more suppliers of their own. However, firm performance is lower when its suppliers are connected to more downstream customers.

Pages: 30 pages
Date: 2014-06
New Economics Papers: this item is included in nep-bec, nep-eff, nep-geo, nep-net, nep-sbm and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
https://www.rieti.go.jp/jp/publications/dp/14e034.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:14034

Access Statistics for this paper

More papers in Discussion papers from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko (tanimoto-toko@rieti.go.jp).

 
Page updated 2024-12-06
Handle: RePEc:eti:dpaper:14034