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Discussion Paper

No. 2009-1 | January 05, 2009
Structure and Temporal Change of Credit Network between Banks and Large Firms in Japan

Abstract

Credit relationships between commercial banks and quoted firms are studied for the structure and its temporal change from the year 1980 to 2005. At each year, the credit network is regarded as a weighted bipartite graph where edges correspond to the relationships and weights refer to the amounts of loans. Reduction in the supply of credit affects firms as debtor, and failure of a firm influences banks as creditor. To quantify the dependency and influence between banks and firms, we propose to define a set of scores of banks and firms, which can be calculated by solving an eigenvalue problem determined the weight of the credit network. We found that a few largest eigenvalues and corresponding eigenvectors are significant by using a null hypothesis of random bipartite graphs, and that the scores can quantitatively describe the stability or fragility of the credit network during the 25 years.

Paper submitted to the special issue “Reconstructing Macroeconomics”
(http://www.economics-ejournal.org/special-areas/special-issues)

JEL Classification

E51 E52 G21

Cite As

Yoshi Fujiwara, Hideaki Aoyama, Yuichi Ikeda, Hiroshi Iyetomi, and Wataru Souma (2009). Structure and Temporal Change of Credit Network between Banks and Large Firms in Japan. Economics Discussion Papers, No 2009-1, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2009-1

Assessment



Comments and Questions


Anonymous - Referee Report
February 16, 2009 - 08:50

see attached file


Yoshi Fujiwara - Reply to Referee Report
February 18, 2009 - 10:36

see attached file


Yoshi Fujiwara - Revised Version
February 18, 2009 - 10:38

see attached file