The Localization of Interfirm Transaction Relationships and Industry Agglomeration

Kentaro Nakajima, Yukiko Saito and Iichiro Uesugi

No 46, HIT-REFINED Working Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: Using a unique and massive dataset on firms' suppliers and customers, we examine the localization of transaction relationships to find the following. First, based on a counterfactual that controls for the location of firms and their potential partners, transaction relationships in about 90 to 95% of the three-digit manufacturing industries are localized within 40km. Second, based on a counterfactual that controls for the average distance of transaction relationships in the entire manufacturing sector, in about 40% of industries transaction relationships are localized. Third, the extent of industry agglomeration and the extent of the localization of transaction relationships are positively correlated.

Keywords: Interfirm transactions; agglomeration; transaction distance (search for similar items in EconPapers)
JEL-codes: R11 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2016-03
New Economics Papers: this item is included in nep-com, nep-cse, nep-geo, nep-mkt, nep-sbm and nep-ure
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https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/27777/wp046.pdf

Related works:
Working Paper: Localization of Interfirm Transaction Relationships and Industry Agglomeration (2012)
Working Paper: The Localization of Interfirm Transaction Relationships and Industry Agglomeration (2012)
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