Inter-firm Network Dynamics of Production during the COVID-19 Pandemic

Yukiko Saito, Xinyi Tong and Kongphop Wongkaew

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

Abstract: This paper examines the dynamics of the Japanese production network during the COVID-19 pandemic. We utilize a panel dataset of approximately 1.8 million firms spanning from 2015 to 2023 and document that firms largely maintained existing inter-firm relationships during the early stages of the pandemic, often before severing ties in subsequent periods. Moreover, new link formation did not recover at a commensurate pace, resulting a net contraction of the production network. Furthermore, we identify a shift in the geographical distance between transacted firms. Firms increasingly dropped local partners but added distant partners. Notably, changes in network dynamics and geographical distance were driven by firms with high ICT intensity and those located in core prefectures.

Pages: 36 pages
Date: 2026-04
New Economics Papers: this item is included in nep-bec, nep-eff, nep-ict and nep-net
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:26027

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