Modeling and Application of Transaction Network of Real Business Firms
Speaker : Associate Professor
Tokyo Institute of Technology, Japan
Chair : Professor John Stephen Lansing
First, we review big-data analysis of business firms in Japan which includes about 1 million firms' financial accountings with about 4 million transaction relations for 20 years. Various scaling laws are confirmed such as power law distributions of sales, number of employees and number of business partners. Next, we introduce a model of network formation which fulfills most of empirical laws. We also introduce a model of network flow which enables estimation of amount of money flow between any pair of business firms. Based on these models we can estimate economic damage caused by natural disasters such as earthquake by assuming sudden suspension of business activities for those firms in a given region . We show that the economic effect develops over the whole country via the business network.