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

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Listed:
  • Ryohei Hisano
  • Tsutomu Watanabe
  • Takayuki Mizuno
  • Takaaki Ohnishi
  • Didier Sornette

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.

Suggested Citation

  • Ryohei Hisano & Tsutomu Watanabe & Takayuki Mizuno & Takaaki Ohnishi & Didier Sornette, 2015. "The gradual evolution of buyer--seller networks and their role in aggregate fluctuations," Papers 1506.00236, arXiv.org, revised Aug 2016.
    • Handle: RePEc:arx:papers:1506.00236
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