Corporate Spending Linkages Through Supply Chains

This paper, titled “Corporate Spending Linkages Through Supply Chains,” appears in the Bank of Japan Working Paper Series. Dated August 12, 2026, it was written by Kosuke Aoki, Ko Adachi, Taiki Ono, Yoshiyuki Kurachi, and Akitoshi Toyoda.

Using production network data from Japan’s manufacturing sector, the paper empirically analyzes how corporate spending behavior becomes linked along supply chains, examining capital investment and wage setting separately.

Based on its findings, the paper shows that analyzing corporate developments while considering the multilayered supply chain structure centered on large manufacturing firms is important for understanding the dynamics of Japan’s economy.

First, the paper confirms bonus linkages within supply chains originating from temporary foreign demand shocks. Second, it clarifies that, as a linkage operating through broader channels, corporate capital investment is affected by investment trends downstream in supply chains, whether domestic or international.

It further shows that corporate decisions on regular wages are influenced by developments at the apex firms of the supply chains to which those companies belong. The paper’s contents and opinions belong to the individual authors and do not represent the official views of the Bank of Japan.