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Role of Hub Firms in Geographical Transaction Network

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  • Yukiko SAITO

Abstract

In this study, we investigate the role of geographical proximity in an inter-firm transaction network and the role of hub firms on geographical spread of regional impact. By using inter-firm micro transaction data of over 800 thousands firms, we found that indirect transaction is geographically dispersed mainly due to a few hub firms, although firm's direct transactions mostly occur within geographically narrow areas. More precisely, median distance between indirect transaction partners (partners' partners) is 255km, which is much larger than that between direct transaction partners (29km). In a counterfactual transaction network without hub firms, whose transaction relations are no less than 100, median distance between indirect transaction partners is reduced to 70km, thereby suggesting the important role of hub firms in a geographical transaction network. We confirm this suggestion through an analysis of regional impact of the Great East Japan Earthquake.

Suggested Citation

  • Yukiko SAITO, 2013. "Role of Hub Firms in Geographical Transaction Network," Discussion papers 13080, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:13080
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    Cited by:

    1. Vasco M Carvalho & Makoto Nirei & Yukiko U Saito & Alireza Tahbaz-Salehi, 2021. "Supply Chain Disruptions: Evidence from the Great East Japan Earthquake," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(2), pages 1255-1321.
    2. Hazem KRICHENE & Yoshiyuki ARATA & Abhijit CHAKRABORTY & Yoshi FUJIWARA & Hiroyasu INOUE, 2018. "How Firms Choose their Partners in the Japanese Supplier-Customer Network? An application of the exponential random graph model," Discussion papers 18011, Research Institute of Economy, Trade and Industry (RIETI).
    3. Yukiko Saito & Makoto Nirei & Vasco Carvalho, 2014. "Supply Chain Disruptions: Evidence from Great East Japan Earthquake," 2014 Meeting Papers 595, Society for Economic Dynamics.
    4. Ali Tosyali & Jeongsub Choi & Byunghoon Kim & Hoshin Lee & Myong K. Jeong, 2021. "A dynamic graph-based approach to ranking firms for identifying key players using inter-firm transactions," Annals of Operations Research, Springer, vol. 303(1), pages 5-27, August.

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