Introduction
Interorganizational structures and performance in Japanese automotive keiretsu networks
The evolution of Japanese keiretsu networks
Intermediation, closure, embeddedness, and performance
Unbundling interorganizational network effects
Endogenous network evolution
Network consequences: topology versus flows
Hypotheses
Supply network data and firm performance measures
Min. | Median | Mean | Max. | NA | |
---|---|---|---|---|---|
Revenues in 2006 [thousands of yen] | 7.39*106
| 7.27*107
| 3.88*108
| 9.22*109
| 1 |
Revenues in 2011 [thousands of yen] | 5.00*106
| 8.10*107
| 4.02*108
| 8.24*109
| 8 |
Employees in 2006 | 800 | 1395 | 4316 | 65994 | 0 |
Employees in 2011 | 630 | 1580 | 4862 | 69310 | 7 |
RPE in 2006 [thousands of yen/person] | 7393 | 52390 | 61220 | 143900 | 1 |
RPE in 2011 [thousands of yen/person] | 6098 | 48960 | 57980 | 20560 | 8 |
logRPE 2006 | 8.908 | 10.87 | 10.88 | 11.88 | 1 |
logRPE 2011 | 8.716 | 10.8 | 10.81 | 12.23 | 8 |
Profit in 2006 [thousands of yen] | −5.26*108
| 1.50*106
| 6.12*106
| 5.29*108
| 2 |
Profit in 2011 [thousands of yen] | −3.97*107
| 1.54*106
| 4.59*106
| 8.67*107
| 10 |
ROS in 2006 | −0.452 | 0.019 | 0.013 | 0.088 | 2 |
ROS in 2011 | −0.113 | 0.016 | 0.019 | 0.152 | 11 |
Number of suppliers in 2006 | 0 | 1 | 4.5 | 45 | |
Number of suppliers in 2011 | 0 | 2 | 5.2 | 41 |
Stochastic actor-oriented network modeling
General introduction
Drivers of network and performance change
Effect name (Additional description) | Mathematical formula | Graphical representation | |
---|---|---|---|
1. Network dynamics
| |||
1.1. Endogenous trade network interdependencies
Network → network | |||
Reciprocity (Favor firms that buy something from our firm) |
\( {\displaystyle \sum_j{x}_{ij}{x}_{j i}} \)
| ||
Preference for firms with partners in common (i.e., firms within the same trading group) | Transitive triplets (Hierarchical cliques) |
\( {\displaystyle \sum_{j, h}{x}_{ij}{x}_{j h}{x}_{hi}} \)
| |
Three-cycles (Non-hierarchical cliques) |
\( {\displaystyle \sum_{j, h}{x}_{j i}{x}_{ih}{x}_{j h}} \)
| ||
Common suppliers (Connect with firms that use the same suppliers) |
\( {\displaystyle \sum_j{x}_{ij}}{\displaystyle \sum_{\begin{array}{c}\hfill h\hfill \\ {}\hfill h\ne i, j\hfill \end{array}}\left({b}_0 x-\left|{x}_{ih}-{x}_{j h}\right|\right)} \)
| ||
Number of second-tier suppliers (Connect with multiple primary suppliers through intermediaries) | # [j|x
ij
= 0, max(x
ih
x
hj
) > 0] | ||
Indegree popularity (Seek the most popular suppliers) |
\( {\displaystyle \sum_j{x}_{ij}}{\displaystyle {\sum}_h{x}_{h j}} \)
| ||
Outdegree (Control for network density) |
\( {\displaystyle \sum_j{x}_{ij}} \)
| ||
1.2. Effects of firms’ performance z on supply network structures
Performance → network | |||
Client’s performance (High-performing firms connect with more suppliers) |
\( {\displaystyle \sum_j{x}_{i j}{z}_i} \)
| ||
Supplier’s performance (Selecting high-performing firms as suppliers) |
\( {\displaystyle \sum_j{x}_{ij}{z}_j} \)
| ||
Similarity of performance (Preference for firms with similar performance) |
\( {\displaystyle \sum_j{x}_{ij}\left( si{m}_{ij}^z-\overline{si{m}^z}\right)} \)
| ||
2. Performance dynamics
| |||
Linear performance trend (Baseline revenue trend) |
z
i
| ||
Performance → revenues | |||
Quadratic performance trend (The effect of current performance on the future performance trend) |
\( {z}_i^2 \)
| ||
Network → performance | |||
(A) Topology: The effect of the number of suppliers on the future performance trend |
\( {z}_i{\displaystyle \sum_j{x}_{i j}} \)
| ||
B Flow: The effect of the suppliers’ performance on the performance trend |
\( {\displaystyle \sum_j{x}_{ij}\left( si{m}_{ij}^z - \overline{si{m}^z}\ \right)} \)
|
Simulation and model validation
Resulting model
Results
Descriptive statistics
Count | |
---|---|
Network dynamics | |
Whole network density in 2006 | 0.045 |
Whole network density in 2011a
| 0.059 |
Average number of suppliers in 2006 | 4.50 |
Average number of suppliers in 2011a
| 5.88 |
Preserved supply relationship | 388 |
New suppliers | 131 |
Abandoned suppliers | 38 |
Total of changes | 169 |
Jaccard index | 0.697 |
Missing links in 2006 | 0% |
Missing links in 2011 | 11.7% |
RPE performance categories | |
Low revenue firms in 2006 (logRPE < 10.5) | 21 |
Middle revenue firms in 2006 (10.5 < =logRPE < 11.5) | 62 |
High revenue firms in 2006 (logRPE > =11.5) | 16 |
NA in 2006 | 1 |
Low revenue firms in 2011 (logRPE < 10.5) | 25 |
Middle revenue firms in 2011 (10.5 < =logRPE < 11.5) | 55 |
High revenue firms in 2011 (logRPE > =11.5) | 12 |
NA in 2011 | 8 |
ROS performance categories | |
Loss-making firms in 2006 (ROS < 0) | 12 |
Middle return firms in 2006 (0 < =ROS < =0.03) | 59 |
High return firms in 2006 (ROS > 0.03) | 29 |
Loss-making firms in 2011 (ROS < 0) | 27 |
Middle return firms in 2011 (0 < =ROS < =0.03) | 48 |
High return firms in 2011 (ROS > 0.03) | 25 |
Modeling results
RPE | ROS | |||||||
---|---|---|---|---|---|---|---|---|
Topology | Flow | Topology | Flow | |||||
Effect name | Parameter estimate | Std. error | Parameter estimate | Std. error | Parameter estimate | Std. error | Parameter estimate | Std. error |
1. Network dynamics
| ||||||||
1.1. Endogenous trade network interdependencies
Network → network | ||||||||
Reciprocity | 2.120* | 0.308 | 2.151* | 0.295 | 2.741* | 0.252 | 2.204* | 0.454 |
Transitive triplets | 0.116 | 0.071 | 0.078 | 0.056 | 0.089 | 0.060 | 0.087 | 0.053 |
Three-cycles | 0.139 | 0.135 | 0.150 | 0.143 | 0.153 | 0.144 | 0.153 | 0.154 |
Same suppliers | −0.063* | 0.025 | −0.064* | 0.023 | −0.073* | 0.027 | −0.067* | 0.020 |
Number of second-tier suppliers | −0.137* | 0.038 | −0.138* | 0.044 | −0.132* | 0.033 | −0.121* | 0.023 |
Indegree popularity | 0.113* | 0.027 | 0.116* | 0.024 | 0.118* | 0.024 | 0.117* | 0.028 |
Outdegree | −2.593* | 0.356 | −2.699* | 0.314 | −2.635* | 0.337 | −2.754* | 0.212 |
1.2. Effects of firms’ performance z on supply network structures
Performance → network | ||||||||
Client’s performance | 1.135 | 1.303 | −0.327 | 1.831 | −0.982 | 1.361 | −0.688 | 1.336 |
Supplier’s performance | 0.049 | 0.461 | 0.029 | 0.774 | 0.206 | 0.445 | 0.195 | 0.624 |
Similarity in performance | −3.022 | 1.776 | −3.953 | 3.562 | −1.451 | 1.587 | −1.231 | 2.410 |
2. Performance dynamics
| ||||||||
Baseline performance trend | −0.673* | 0.231 | −0.174 | 0.180 | −0.058 | 0.167 | −0.051 | 0.194 |
Performance → performance | ||||||||
Quadratic revenue trend | −1.267* | 0.373 | −1.296* | 0.470 | −0.248 | 0.278 | 0.006 | 0.382 |
Network → performance | ||||||||
Topology: The effect of the number of suppliers on the future performance trend | 0.101* | 0.033 | −0.002 | 0.012 | ||||
Flow: The effect of the suppliers’ performance on the client’s performance trend | −0.217* | 0.110 | 0.209 | 0.212 |