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Money flow network among firms' accounts in a regional bank of Japan

Author

Listed:
  • Yoshi Fujiwara
  • Hiroyasu Inoue
  • Takayuki Yamaguchi
  • Hideaki Aoyama
  • Takuma Tanaka
Abstract
In this study, we investigate the flow of money among bank accounts possessed by firms in a region by employing an exhaustive list of all the bank transfers in a regional bank in Japan, to clarify how the network of money flow is related to the economic activities of the firms. The network statistics and structures are examined and shown to be similar to those of a nationwide production network. Specifically, the bowtie analysis indicates what we refer to as a "walnut" structure with core and upstream/downstream components. To quantify the location of an individual account in the network, we used the Hodge decomposition method and found that the Hodge potential of the account has a significant correlation to its position in the bowtie structure as well as to its net flow of incoming and outgoing money and links, namely the net demand/supply of individual accounts. In addition, we used non-negative matrix factorization to identify important factors underlying the entire flow of money; it can be interpreted that these factors are associated with regional economic activities.One factor has a feature whereby the remittance source is localized to the largest city in the region, while the destination is scattered. The other factors correspond to the economic activities specific to different local places.This study serves as a basis for further investigation on the relationship between money flow and economic activities of firms.

Suggested Citation

  • Yoshi Fujiwara & Hiroyasu Inoue & Takayuki Yamaguchi & Hideaki Aoyama & Takuma Tanaka, 2020. "Money flow network among firms' accounts in a regional bank of Japan," Papers 2007.14630, arXiv.org, revised Jul 2020.
    • Handle: RePEc:arx:papers:2007.14630
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    References listed on IDEAS

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    1. Hiroyasu Inoue & Yasuyuki Todo, 2020. "The propagation of economic impacts through supply chains: The case of a mega-city lockdown to prevent the spread of COVID-19," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-10, September.
    2. Y. Fujiwara & H. Aoyama, 2010. "Large-scale structure of a nation-wide production network," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 77(4), pages 565-580, October.
    3. Hiroyasu Inoue & Yasuyuki Todo, 2019. "Firm-level propagation of shocks through supply-chain networks," Nature Sustainability, Nature, vol. 2(9), pages 841-847, September.
    4. Abhijit Chakraborty & Yuichi Kichikawa & Takashi Iino & Hiroshi Iyetomi & Hiroyasu Inoue & Yoshi Fujiwara & Hideaki Aoyama, 2018. "Hierarchical communities in the walnut structure of the Japanese production network," PLOS ONE, Public Library of Science, vol. 13(8), pages 1-25, August.
    5. Daniel D. Lee & H. Sebastian Seung, 1999. "Learning the parts of objects by non-negative matrix factorization," Nature, Nature, vol. 401(6755), pages 788-791, October.
    6. KICHIKAWA Yuichi & IINO Takashi & IYETOMI Hiroshi & INOUE Hiroyasu, 2019. "Hierarchical and Circular Flow Structure of the Interfirm Transaction Network in Japan," Discussion papers 19063, Research Institute of Economy, Trade and Industry (RIETI).
    7. Martin Rosvall & Carl T Bergstrom, 2011. "Multilevel Compression of Random Walks on Networks Reveals Hierarchical Organization in Large Integrated Systems," PLOS ONE, Public Library of Science, vol. 6(4), pages 1-10, April.
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    Cited by:

    1. Hiroyasu Inoue & Yohsuke Murase & Yasuyuki Todo, 2021. "Do economic effects of the anti-COVID-19 lockdowns in different regions interact through supply chains?," PLOS ONE, Public Library of Science, vol. 16(7), pages 1-19, July.

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