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Abstract

Vol. 58, No. 4, pp. 302-313 (2007)

“Firm Size and Interfirm Relationships”
Yukiko Umeno Saito (Fujitsu Research Institute), Tsutomu Watanabe (Institute of Economic Research, Hitotsubashi University)

This paper studies the relationship between firms' size and the number of their business partners by employing a unique data set covering about 820,000 Japanese firms. First, we find that the number of interfirm relationships, measured by the indegree, has a fat-tail distribution: the top 1 percent firms occupy about 50 percent of all interfirm relationships. Second, the indegree distribution for those firms with a large number of relationships, or "hub" firms, also exhibits a fat-tail, indicating the existence of "super-hub" firms. Third, larger firms tend to have more relationships, but the relationship between firms' size and the number of their indegree is not necessarily proportional. Firms already with a large number of relationships do not increase it with their size.