Interfirm networks in manufacturing industry agglomerations in Japan: evidence from survey data

Abstract

This chapter focuses on interfirm networks in Japan’s major manufacturing agglomerations and conducts fact-finding analyses on the following three issues: (1) the nature of interfirm transaction relationships, including developments in such relationships over time; (2) firms’ participation in network activities other than supplier-customer transactions; and (3) interactions between interfirm transaction relationships and relationships of other types. Based on the results of a unique firm-level survey completed by more than 1800 firms in December 2009, it is found, first, that the number of interfirm transaction relationships, especially those involving smaller firms, has declined over the past ten years. Second, the survey indicates that, apart from transaction relationships, many firms participated in group activities in individual industry associations and local chambers of commerce, indicating that firms tend to maintain relationships with firms similar to themselves. Third, it is found that bank lending attitudes are positively associated with the extent to which a firm is interconnected with other local firms, indicating that interfirm and firm-bank relationships are complementary.