Energy and resilience

The effects of endogenous interdependencies on trade network formation across space among major Japanese firms

Petr Matous, Yasuyuki Todo

    Research output: Contribution to journalReview article

    3 Citations (Scopus)

    Abstract

    The dynamic drivers of interfirm interactions across space have rarely been explored in the context of disaster recovery; therefore, the mechanism through which shocks propagate is unclear. This paper uses stochastic actor-oriented modeling to examine how trade networks among the 500 largest Japanese companies evolved during 2010 and 2011, i.e. before and after the Great East Japan Earthquake to identify sources of vulnerability in the system. In contrast to previous reports on broken supply chains, the network displayed only modest change even in the directly affected areas. Controlling for distance and for firm size, we find that when firms changed their partners, they preferred firms that were popular among other firms, that had partners in common with them and that also bought some products or services from them. These findings concur with a criticism that Japanese firms avoid external actors and exhibit inflexibility in reorganizing their networks in times of need, which contrasts with the non-cliquish network structures observed in high-performing economic sectors. The results also highlight the role of energy firms in disaster resilience. Unlike other large Japanese companies that cluster in major urban centers, energy firms are distributed across Japan. However, despite their peripheral physical locations, energy firms are centrally located in trade networks. Thus, while a disaster in any region may affect some energy firms and lead to large-scale temporary shocks, the entire network is unlikely to be disconnected by any region-specific disaster because of the spatial distribution of the topological network core formed by energy companies.

    Original languageEnglish
    Pages (from-to)141-163
    Number of pages23
    JournalNetwork Science
    Volume4
    Issue number2
    DOIs
    Publication statusPublished - 2016 Jun 1

    Fingerprint

    Disasters
    resilience
    firm
    energy
    Shock
    Japan
    disaster
    Industry
    Earthquakes
    Supply chains
    Spatial distribution
    Economics
    Recovery
    economic sector
    natural disaster
    vulnerability
    criticism
    driver
    supply
    interaction

    Keywords

    • disaster resilience
    • geography
    • interfirm networks
    • Japan
    • network evolution
    • stochastic actor-oriented models

    ASJC Scopus subject areas

    • Communication
    • Social Psychology
    • Sociology and Political Science

    Cite this

    Energy and resilience : The effects of endogenous interdependencies on trade network formation across space among major Japanese firms. / Matous, Petr; Todo, Yasuyuki.

    In: Network Science, Vol. 4, No. 2, 01.06.2016, p. 141-163.

    Research output: Contribution to journalReview article

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    abstract = "The dynamic drivers of interfirm interactions across space have rarely been explored in the context of disaster recovery; therefore, the mechanism through which shocks propagate is unclear. This paper uses stochastic actor-oriented modeling to examine how trade networks among the 500 largest Japanese companies evolved during 2010 and 2011, i.e. before and after the Great East Japan Earthquake to identify sources of vulnerability in the system. In contrast to previous reports on broken supply chains, the network displayed only modest change even in the directly affected areas. Controlling for distance and for firm size, we find that when firms changed their partners, they preferred firms that were popular among other firms, that had partners in common with them and that also bought some products or services from them. These findings concur with a criticism that Japanese firms avoid external actors and exhibit inflexibility in reorganizing their networks in times of need, which contrasts with the non-cliquish network structures observed in high-performing economic sectors. The results also highlight the role of energy firms in disaster resilience. Unlike other large Japanese companies that cluster in major urban centers, energy firms are distributed across Japan. However, despite their peripheral physical locations, energy firms are centrally located in trade networks. Thus, while a disaster in any region may affect some energy firms and lead to large-scale temporary shocks, the entire network is unlikely to be disconnected by any region-specific disaster because of the spatial distribution of the topological network core formed by energy companies.",
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