The gradual evolution of buyer–seller networks and their role in aggregate fluctuations

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Abstract

Buyer–seller relationships among firms can be regarded as a longitudinal network in which the connectivity pattern evolves as each firm receives productivity shocks. Based on a data set describing the evolution of buyer–seller links among 55,608 firms over a decade and structural equation modeling, we find some evidence that interfirm networks evolve reflecting a firm’s local decisions to mitigate adverse effects from neighbor firms through interfirm linkage, while enjoying positive effects from them. As a result, link renewal tends to have a positive impact on the growth rates of firms. We also investigate the role of networks in aggregate fluctuations.

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APA

Hisano, R., Watanabe, T., Mizuno, T., Ohnishi, T., & Sornette, D. (2017). The gradual evolution of buyer–seller networks and their role in aggregate fluctuations. Applied Network Science, 2(1). https://doi.org/10.1007/s41109-017-0030-7

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