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Business transactions and ownership ties between firms – new article by László Lőrincz, Sándor Juhász & Rebeka O. Szabó

 

 

Business transactions and ownership ties between firms

 

László Lőrincz – Sándor Juhász – Rebeka O. Szabó 

 

Published online by Cambridge University Press:  16 October 2023

Research Article – Network Science , First View , pp. 1 – 20

 

Abstract
 
 

In this study, we investigate the creation and persistence of interfirm ties in a large-scale business transaction network. Business transaction relations (firms buying or selling products or services to each other) are driven by economic motives, but because trust is essential to business relationships, the social connections of owners or the geographical proximity of firms can also influence their development. However, studying the formation of interfirm business transaction ties on a large scale is rare, because of the significant data demand. The business transaction and the ownership networks of Hungarian firms are constructed from two administrative datasets for 2016 and 2017. We show that direct or indirect connections in this two-layered network, including open triads in the business network, contribute to both the creation and persistence of business transaction ties. For our estimations, we utilize log-linear models and emphasize their efficiency in predicting links in such large networks. We contribute to the literature by presenting different patterns of business connections in a nationwide multilayer interfirm network.

Keywords: transaction network, ownership network, multilayer network, network motifs, tie creation, tie persistence

 
 
 

 

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