Do larger firms have more interfirm relationships?

Abstract

In this study, we investigate interfirm networks by employing a unique dataset containing information on more than 800,000 Japanese firms, about half of all corporate firms currently operating in Japan. First, we find that the number of relationships, measured by the indegree, has a fat tail distribution, implying that there exist "hub" firms with a large number of relationships. Moreover, the indegree distribution for those hub firms also exhibits a fat tail, suggesting the existence of "super-hub" firms. Second, we find that larger firms tend to have more counterparts, but the relationship between firms' size and the number of their counterparts is not necessarily proportional; firms that already have a large number of counterparts tend to grow without proportionately expanding it.

Network Structure of Japanese Firms - Scale-Free, Hierarchy, and Degree Correlation: Analysis from 800,000 Firms

“…In contrast, our data contain 800,000 firms. Saito et al (2007) used the same data as ours and their study revealed that the directed network had a scale-free distribution. We believe that some important network characteristics remain undiscovered and feel that we will be able to discover some significant ones.…”

“…The solid line in Fig.3 illustrates the 1 − CDF of degree distribution in log-log plots. Saito et al (2007) shows that the directed network of the transactions of Japanese firms in which the buying and selling transactions are distinguished from each other has a scale-free distribution. On the other hand, we show that the degree distribution of an undirected network, 3 in which we consider that the firms are linked if there exists either transaction, follows a scale-free distribution of the form…”

The Network Composition of Aggregate Unemployment

“…Because frictions are captured in the form of a network, there is no need to assume an aggregate matching process. Fourth, it strengthens the growing literature of inter-firm networks (Saito et al, 2007;Konno, 2009;Atalay et al, 2011;Acemoglu et al, 2012;di Giovanni et al, 2014). By avoiding aggregation into arbitrary submarkets, the network approach allows to study firm and labor dynamics jointly.…”

Scale-Free Properties of Board and Director Networks Quantities

“…Despite their significant variations in individual constituents, social, information, technological and biological networks are inclined to follow a universal law of power-law distribution [4][5][6]. For instance, it has been reported that metabolic networks [7], the WorldWide Web [8,9], Internet [10], scientific collaboration and publications citation network [11][12][13], stock market prices network [14,15], stock ownership networks [16], movie actor network [17], network of sexual relationships [18], and inter-firm relationships network [19,20] are scale-free.…”