Mapping Japan’s Manufacturing Supply Chains with Firm-Level Transaction Data

This article analyzes interfirm connections in Japan’s manufacturing sector using highly granular interfirm transaction data. The central focus of the research is to view supply chains as a multilayered and extensive structure and quantitatively clarify their characteristics.

The analysis also examines how firm-level shocks arising on both the supply and demand sides affect the manufacturing sector as a whole through supply chains.

Supply constraints affecting firms and items that may become bottlenecks in supply chains significantly depress macroeconomic production.

Holding inventories may serve as an effective measure to some extent for mitigating the effects of supply constraints.

Based on interfirm transaction data, the study identifies the manufacturing sector’s supply chain structure and quantitatively analyzes the network’s characteristics.

Supply chains centered on automobile manufacturers stand out for their length and the breadth of their trading partners. The quantitative analysis showed that their impact on individual supplier firms is also greater than in other industries.

Considering firm-level shocks on both the supply and demand sides, the study examines supply constraints affecting firms and items that may become bottlenecks in supply chains, as well as the mitigation of their effects through inventory holdings.