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Disruption Risk Evaluation on a Large-scale Production Network with Establishments and Products

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  • INOUE Hiroyasu
  • TODO Yasuyuki

Abstract

We constructed an establishment-level production network where each establishment inputs and outputs multiple products, using data that includes the firm-level production network and all establishments within those firms. The network represents the manufacturing sector with 183,951 establishments across 157,537 firms and 919,982 inter-establishment linkages. A probabilistic model of supply chain disruptions was applied to this network. The key findings are as follows: (1) The establishment-level network exhibits greater shock propagation compared to the firm-level network. (2) Incorporating actual product information leads to a larger impact on propagation compared to using industry-level information. (3) Regional shock simulations reveal that while the firm-level network shows greater shock propagation when the shock originates in Tokyo, no such difference is observed in the establishment-level network.

Suggested Citation

  • INOUE Hiroyasu & TODO Yasuyuki, 2024. "Disruption Risk Evaluation on a Large-scale Production Network with Establishments and Products," Discussion papers 24076, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:24076
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    References listed on IDEAS

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