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Supply chain network rewiring dynamics at the firm level
Tobias Reisch1, András Borsos1,2, Stefan Thurner1,3,4,5
1Complexity Science Hub Vienna, Vienna A-1080, Austria.
PNAS Nexus
|May 1, 2026
Summary
Supply chain networks are dynamic, with about 25% of firms exiting and 28% entering annually. This study reveals supply link half-life is 13 months, impacting economic resilience.
Area of Science:
- Economics
- Network Science
- Sociology
Background:
- Supply chain networks (SCN) are fundamental to societal function and economic activity.
- SCNs are not static, experiencing continuous change through firm entry/exit and evolving supplier-buyer relationships.
Purpose of the Study:
- To analyze the temporal evolution of firms and their connections within a national supply chain network.
- To develop a statistical model that replicates observed network dynamics and risk profiles.
Main Methods:
- Utilized Hungarian value-added tax data from 2014-2022, covering 711,248 companies and 38,644,400 connections.
- Reconstructed the national economy at a firm-level resolution to track changes in firms and supply links.
- Calibrated a statistical network generation model to match empirical network characteristics.
Main Results:
- Annual firm turnover: 25% exit, 28% enter.
- Supply link persistence: 55% of links change yearly, with a half-life of 13 months.
- New links preferentially attach to highly connected firms (p(i) ∝ k_i^1.08).
Conclusions:
- The study provides a detailed, firm-level view of national supply chain network dynamics.
- The developed model accurately reproduces network features and systemic risk profiles.
- Understanding these rewiring dynamics is crucial for assessing economic resilience and shock propagation.
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