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Hierarchical Communities in the Walnut Structure of Japanese Production Networks

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  • Abhijit CHAKRABORTY
  • KICHIKAWA Yuichi
  • IYETOMI Hiroshi
  • IINO Takashi
  • INOUE Hiroyasu
  • FUJIWARA Yoshi
  • AOYAMA Hideaki

Abstract

The structure of Japanese production networks with one million firms and five million supplier-customer links is studied. It is found that they form a tightly-knit structure with a core giant strongly connected component (GSCC) surrounded by IN and OUT components constituting two half-shells for the GSCC, which we name the Walnut structure after its shape. The hierarchical structure of communities is studied by the Infomap method and most of the irreducible communities are found to be on the second level. Composition of some of the major communities, including overexpression of industrial and regional nature, as well as connections between the communities, is studied in detail. The findings obtained here cast doubt on the validity and accuracy of the conventional input-output analysis, which is expected to be useful if firms in the same sectors would be well connected with each other.

Suggested Citation

  • Abhijit CHAKRABORTY & KICHIKAWA Yuichi & IYETOMI Hiroshi & IINO Takashi & INOUE Hiroyasu & FUJIWARA Yoshi & AOYAMA Hideaki, 2018. "Hierarchical Communities in the Walnut Structure of Japanese Production Networks," Discussion papers 18026, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:18026
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    11. Abhijit Chakraborty & Yuichi Kichikawa & Takashi Iino & Hiroshi Iyetomi & Hiroyasu Inoue & Yoshi Fujiwara & Hideaki Aoyama, 2018. "Hierarchical communities in the walnut structure of the Japanese production network," PLOS ONE, Public Library of Science, vol. 13(8), pages 1-25, August.
    12. Hazem Krichene & Abhijit Chakraborty & Hiroyasu Inoue & Yoshi Fujiwara, 2017. "Business cycles’ correlation and systemic risk of the Japanese supplier-customer network," PLOS ONE, Public Library of Science, vol. 12(10), pages 1-22, October.
    13. Hazem KRICHENE & ARATA Yoshiyuki & Abhijit CHAKRABORTY & FUJIWARA Yoshi & INOUE Hiroyasu, 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).
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    Cited by:

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    2. Yuji Fujita & Yoshi Fujiwara & Wataru Souma, 2019. "Macroscopic features of production network and sequential graph drawing," Evolutionary and Institutional Economics Review, Springer, vol. 16(1), pages 183-199, June.
    3. Corrado Di Guilmi & Yoshi Fujiwara, 2020. "Does the supply network shape the firm size distribution? The Japanese case," CAMA Working Papers 2020-66, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    4. Abhijit Chakraborty & Hiroyasu Inoue & Yoshi Fujiwara, 2020. "Economic complexity of prefectures in Japan," PLOS ONE, Public Library of Science, vol. 15(8), pages 1-13, August.
    5. Abhijit Chakraborty & Yuichi Kichikawa & Takashi Iino & Hiroshi Iyetomi & Hiroyasu Inoue & Yoshi Fujiwara & Hideaki Aoyama, 2018. "Hierarchical communities in the walnut structure of the Japanese production network," PLOS ONE, Public Library of Science, vol. 13(8), pages 1-25, August.
    6. FUJIWARA Yoshi & INOUE Hiroyasu & YAMAGUCHI Takayuki & AOYAMA Hideaki & TANAKA Takuma & KIKUCHI Kentaro, 2021. "Money Flow Network Among Firms' Accounts in a Regional Bank of Japan," Discussion papers 21005, Research Institute of Economy, Trade and Industry (RIETI).
    7. Matthias Raddant & Hiroshi Takahashi, 2022. "Corporate boards, interorganizational ties and profitability: the case of Japan," Empirical Economics, Springer, vol. 62(3), pages 1365-1406, March.
    8. Yoshi Fujiwara & Hiroyasu Inoue & Takayuki Yamaguchi & Hideaki Aoyama & Takuma Tanaka, 2020. "Money flow network among firms' accounts in a regional bank of Japan," Papers 2007.14630, arXiv.org, revised Jul 2020.
    9. Hiromitsu Goto & Wataru Souma & Mari Jibu & Yuichi Ikeda, 2020. "Multilayer Network Analysis of the Drug Pipeline in the Global Pharmaceutical Industry," Papers 2003.04620, arXiv.org.
    10. Kumar, Ashish & Chakrabarti, Anindya S. & Chakraborti, Anirban & Nandi, Tushar, 2021. "Distress propagation on production networks: Coarse-graining and modularity of linkages," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 568(C).
    11. KICHIKAWA Yuichi & IINO Takashi & IYETOMI Hiroshi & INOUE Hiroyasu, 2019. "Hierarchical and Circular Flow Structure of the Interfirm Transaction Network in Japan," Discussion papers 19063, Research Institute of Economy, Trade and Industry (RIETI).
    12. Hideaki Aoyama, 2021. "XRP Network and Proposal of Flow Index," Papers 2106.10012, arXiv.org.
    13. C'elestin Coquid'e & Leonardo Ermann & Jos'e Lages & D. L. Shepelyansky, 2019. "Influence of petroleum and gas trade on EU economies from the reduced Google matrix analysis of UN COMTRADE data," Papers 1903.01820, arXiv.org.
    14. Yuichi Kichikawa & Takashi Iino & Hiroshi Iyetomi & Hiroyasu Inoue, 2019. "Visualization of a directed network with focus on its hierarchy and circularity," Journal of Computational Social Science, Springer, vol. 2(1), pages 15-23, January.
    15. Abhijit Chakraborty & Hiroyasu Inoue & Yoshi Fujiwara, 2020. "Economic complexity of prefectures in Japan," Papers 2002.05785, arXiv.org, revised Aug 2020.
    16. Daisuke Sato & Yuichi Ikeda & Shuichi Kawai & Maxmilian Schich, 2020. "The sustainability and the survivability of Kyoto’s traditional craft industry revealed from supplier-customer network," PLOS ONE, Public Library of Science, vol. 15(11), pages 1-23, November.
    17. Abhijit Chakraborty & Yuichi Ikeda, 2020. "Bow-tie structure and community identification of global supply chain network," Papers 2003.02343, arXiv.org.
    18. Venera Maratovna Timiryanova, 2019. "Evaluation of Supply Chain Using Hierarchical Analysis," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 178-186.
    19. SATO Daisuke & IKEDA Yuichi & KAWAI Shuichi & Maxmilian SCHICH, 2020. "Supply-Chain Network Analysis of Kyoto's Traditional Craft Industry," Discussion papers 20044, Research Institute of Economy, Trade and Industry (RIETI).
    20. C'elestin Coquid'e & Jos'e Lages & Dima L. Shepelyansky, 2023. "Prospects of BRICS currency dominance in international trade," Papers 2305.00585, arXiv.org.

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