Proceedings of the 9th Joint International Conference on Information Sciences (JCIS-06)

Chain of Firms Bankruptcy

Authors
Yoshi Fujiwara 0
Corresponding Author
Yoshi Fujiwara
0NiCT/ATR CIS Applied Network Science Lab
Available Online October 2006.
DOI
https://doi.org/10.2991/jcis.2006.330How to use a DOI?
Keywords
production network, bankruptcy chain, power-law, econophysics
Abstract
A link in production network is usually a creditor-debtor relationship. If a firm goes into financial insolvency state or bankruptcy, then firms on its upstream can have secondary effect from the bankruptcy. By using the recent 10 years data of bankruptcy in japan, we show that these causes of ``link effect'' are by no means negligible. Indeed, nearly 20\% of total debt (a few percent of GDP) is due to such effect. Moreover, the link effect dominates, in probability, other causes of bankruptcy, such as poor performance in business, in the power-law regime of the distribution of debt when bankrupted. Because the production network has a heavy tail in degree distribution, and the effect due to bankruptcy chain is considerable in its ripple effect.
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Proceedings
9th Joint International Conference on Information Sciences (JCIS-06)
Part of series
Advances in Intelligent Systems Research
Publication Date
October 2006
ISBN
978-90-78677-01-7
ISSN
1951-6851
DOI
https://doi.org/10.2991/jcis.2006.330How to use a DOI?
Open Access
This is an open access article distributed under the CC BY-NC license.

Cite this article

TY  - CONF
AU  - Yoshi Fujiwara
PY  - 2006/10
DA  - 2006/10
TI  - Chain of Firms Bankruptcy
BT  - 9th Joint International Conference on Information Sciences (JCIS-06)
PB  - Atlantis Press
SN  - 1951-6851
UR  - https://doi.org/10.2991/jcis.2006.330
DO  - https://doi.org/10.2991/jcis.2006.330
ID  - Fujiwara2006/10
ER  -