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The Economics of Interfirm Networks pp 157–173Cite as

Geographical Spread of Interfirm Transaction Networks and the Great East Japan Earthquake

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Part of the book series: Advances in Japanese Business and Economics ((AJBE,volume 4))

Abstract

This chapter examines how the impact of the Great East Japan Earthquake spread geographically to unaffected areas through interfirm transaction networks. Previous studies on transaction networks revealed small-world structure and geographical proximity, which have conflicting implications for the geographical impact of the earthquake. Using interfirm transaction data from approximately 800,000 firms, it is examined how firms in physically unaffected areas are linked with those in the affected areas. It is found that only 3 % of firms in unaffected areas have direct transaction links with those in the affected areas. On the other hand, the share increases to 40–60 % if indirectly linked transaction partners (i.e. partners of partners) are taken into account. Further, it is shown that it is a small number hub firms with interfirm links spanning larger distances that are responsible for linking more local networks in different regions and hence for geographically spreading the economic impact of the earthquake.

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Notes

  1. 1.

    A review of power-law distributions in the fields of economics and finance is provided by Gabaix (2009).

  2. 2.

    See http:/newspat.csis.u-tokyo.ac.jpgeocode/.

  3. 3.

    To provide more detailed information, cumulative percentages for each prefecture and industry are shown in the Appendix.

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Author information

Authors and Affiliations

  1. Research Institute of Economy, Trade and Industry, 1-3-1 Kasumigaseki Chiyoda-ku, Tokyo, Japan

    Yukiko Umeno Saito

Authors
  1. Yukiko Umeno Saito
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Corresponding author

Correspondence to Yukiko Umeno Saito .

Editor information

Editors and Affiliations

  1. Graduate School of Economics, The University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo, Japan

    Tsutomu Watanabe

  2. Institute of Economic Research, Hitotsubashi University, 2-1 Naka, Kunitachi, Tokyo, Japan

    Iichiro Uesugi

  3. Faculty of Commerce, Chuo University, 742-1 Higashinakano, Hachioji-shi, Tokyo, Japan

    Arito Ono

Appendix

Appendix

The tables in this appendix provide a more detailed breakdown of the share of firms linked to firms in the affected areas. Specifically, Tables 8.6 and 8.7 present the cumulative percentages of firms by industry, where Table 8.7 focusing on manufacturing industries presents those by more detailed category (two digit industry categories). Table 8.8 shows the cumulative percentages of firms by prefecture.

Table 8.6 Cumulative percentage of firms by industry
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Table 8.7 Cumulative percentages of manufacturing firms
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Table 8.8 Cumulative percentages of firms by prefecture
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Saito, Y. (2015). Geographical Spread of Interfirm Transaction Networks and the Great East Japan Earthquake. In: Watanabe, T., Uesugi, I., Ono, A. (eds) The Economics of Interfirm Networks. Advances in Japanese Business and Economics, vol 4. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55390-8_8

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