The Economics of Interfirm Networks: Main Issues

  • Tsutomu Watanabe
  • Iichiro Uesugi
  • Arito Ono
Part of the Advances in Japanese Business and Economics book series (AJBE, volume 4)


Interfirm networks prevail in many facets of economic activity and are significantly influential across a range of economic phenomena from business cycles to knowledge spillovers. There is a growing concern in the policy arena relating to the vulnerability of such networks based on the casual observation that idiosyncratic shocks on firms can be amplified through interfirm connections and can lead to a systemic crisis. Typical examples are the manufacturing supply-chain networks in the automobile and electronics industries that propagated regionally concentrated shocks—such as the Great East Japan Earthquake and the floods in Thailand, both in 2011—into global ones. The recent global financial crisis has also shown that the failure of a large bank can have significant adverse effects on the economy as a whole via complex transaction networks.

There is growing interest among academic physicists and economists in network formation and functions. The standard economic model...


Cash Holding Bank Relationship Idiosyncratic Shock Great East Japan Earthquake Main Bank 
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Copyright information

© Springer Japan 2015

Authors and Affiliations

  1. 1.Graduate School of EconomicsThe University of TokyoBunkyo-kuJapan
  2. 2.Institute of Economic ResearchHitotsubashi UniversityKunitachiJapan
  3. 3.Chuo UniversityHachioji-shiJapan

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