Production network: Application in China

Abstract

Based on the input-output table and the supplier-customer data disclosed by the listed companies in China, this paper builds China's production network on both industry level and firm level. We describe the characteristics of such network using various network indexes and obtain the following results: first, China's production network on industry level is featured by "small world" and "sparsity," and continues to become sparser. The existence of hub-like sectors makes the influence of sectoral shocks on macro fluctuations increasingly important. Second, China's production network on firm level has three types of structures: horizontal, ring, and star. Automobile and pharmaceutical industries show obvious intra-industry network cluster features. This paper aims to deepen the understanding of production network on both macro and micro levels, and provide a basis for future study on the propagation of external shocks in production networks.