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

Author

Listed:
  • Ryohei Hisano

    (The University of Tokyo)

  • Tsutomu Watanabe

    (The University of Tokyo)

  • Takayuki Mizuno

    (National Institute of Informatics)

  • Takaaki Ohnishi

    (The University of Tokyo)

  • Didier Sornette

    (Swiss Federal Institute of Technology)

Abstract

Buyer-seller relationships among firms can be regarded as a longi- tudinal network in which the connectivity pattern evolves as each firm receives productivity shocks. Based on a data set describing the evolu- tion 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 neigh- bor 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, 2016. "The gradual evolution of buyer-seller networks and their role in aggregate fluctuations," CARF F-Series CARF-F-389, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    • Handle: RePEc:cfi:fseres:cf389
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    References listed on IDEAS

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