Abstract
We present an analysis of the credit market of Japan. The analysis is performed by investigating the bipartite network of banks and firms which is obtained by setting a link between a bank and a firm when a credit relationship is present in a given time window. In our investigation we focus on a community detection algorithm which is identifying communities composed by both banks and firms. We show that the clusters obtained by directly working on the bipartite network carry information about the networked nature of the Japanese credit market. Our analysis is performed for each calendar year during the time period from 1980 to 2011. Specifically, we obtain communities of banks and networks for each of the 32 investigated years, and we introduce a method to track the time evolution of these communities on a statistical basis. We then characterize communities by detecting the simultaneous over-expression of attributes of firms and banks. Specifically, we consider as attributes the economic sector and the geographical location of firms and the type of banks. In our 32 year long analysis we detect a persistence of the over-expression of attributes of clusters of banks and firms together with a slow dynamics of changes from some specific attributes to new ones. Our empirical observations show that the credit market in Japan is a networked market where the type of banks, geographical location of firms and banks and economic sector of the firm play a role in shaping the credit relationships between banks and firms.
Highlights
One key economic questions in the description of markets is whether a market is characterized by an underlying networked structure [1]
To quantitatively evaluate the differences which are present among the partitions obtained in the 20 independent runs performed for each calendar year, we evaluate the adjusted Rand index (ARI) [15] among all the pairs of partitions of the 20 runs
The analysis is performed on the bank-firm bipartite network observed yearly
Summary
One key economic questions in the description of markets is whether a market is characterized by an underlying networked structure [1]. In the presence of a networked structure, the price formation process is affected by the underlying network. In this paper we empirically investigate, with tools of network science, the networked structure of the Japanese credit market over a period of time of more than 30 years. The fact that we investigate the credit market for such a long period of time allows us to show that a networked market is present over the years and that its structure slowly evolve over time.
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