Research Papers

Estimation of Business Relationship by Business Location and Estimation of Industry Statistics from the View Point of Trading Distance

2015 Regional Academic Research Conference

Teikoku Databank has been collecting information on a company’s trading partners. The information collected is for the company as a whole, including all local establishments. Given this, the inter-firm network analysis to-date has been from the perspective of the corporate headquarters transactions with its trading partners. Although, the analysis of inter-firm transactions at the corporate headquarter level gives us a good understanding of the flow of money between corporate entities it does not capture the flow of goods. Since goods are often manufactured in factories located in places different from the headquarters and are transported to factories and warehouses of business partners

There is considerable interest in getting a better understanding of transactions at the local establishment level as it would pave the way for a better understanding of the nature of economic activity in the local economy. In this research, we develop a methodology for estimating inter-firm transactions at the local establishment level. It is based on the hypothesis that inter-firm transactions are conducted between business establishments that are close to each other, in order to reduce transaction costs such as transportation expenses associated with transactions. The construction of inter-firm transactions at the local establishment level provides valuable insights into the functioning of the local economy.