The gradual evolution of buyer--seller networks and their role in aggregate fluctuations

Ryohei Hisano, Tsutomu Watanabe, Takayuki Mizuno, Takaaki Ohnishi and Didier Sornette

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Abstract: Buyer--seller relationships among firms can be regarded as a longitudinal network in which the connectivity pattern evolves as each firm receives productivity shocks. Based on a data set describing the evolution of buyer--seller links among 55,608 firms over a decade and structural equation modeling, we find some evidence that interfirm networks evolve reflecting a firm's local decisions to mitigate adverse effects from neighbor firms through interfirm linkage, while enjoying positive effects from them. As a result, link renewal tends to have a positive impact on the growth rates of firms. We also investigate the role of networks in aggregate fluctuations.

Date: 2015-05, Revised 2016-08
New Economics Papers: this item is included in nep-net and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1506.00236

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