Chain of Firms Bankruptcy
Yoshi Fujiwara 0
0NiCT/ATR CIS Applied Network Science Lab
Available Online October 2006.
- https://doi.org/10.2991/jcis.2006.330How to use a DOI?
- production network, bankruptcy chain, power-law, econophysics
- 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.
- 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 -