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Embedded Trade: A Third‐Party Effect

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  • Sangmoon Kim
  • John Skvoretz

Abstract

Objectives. Previous work on trade, mostly from an economic perspective, assumes dyadic independence, and thus that trade can be explained by attributes of such dyads. We critique these contentions from the perspective of structural embeddedness, hypothesizing that sharing common third‐party trading partners encourages dyadic trade. Methods. We analyze international trade data of 78 countries in 1975 and 1996, using cross‐sectional and longitudinal regression. Results. Regression analyses support our hypothesis. A BIC analysis suggests that the structural embeddedness variables significantly improve the model fit. Conclusion. International exchange of commodities, like other social interactions, is shaped and constrained by structurally determined opportunities. Thus, an explanation of economic behavior, including trade, is not complete without reference to the triads in which a dyad is embedded.

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  • Sangmoon Kim & John Skvoretz, 2010. "Embedded Trade: A Third‐Party Effect," Social Science Quarterly, Southwestern Social Science Association, vol. 91(4), pages 964-983, December.
    • Handle: RePEc:bla:socsci:v:91:y:2010:i:4:p:964-983
    DOI: 10.1111/j.1540-6237.2010.00744.x
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    References listed on IDEAS

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    1. Barry Eichengreen & Douglas A. Irwin, 1998. "The Role of History in Bilateral Trade Flows," NBER Chapters, in: The Regionalization of the World Economy, pages 33-62, National Bureau of Economic Research, Inc.
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    1. Jayson S. Jia & Yiwei Li & Xin Lu & Yijian Ning & Nicholas A. Christakis & Jianmin Jia, 2021. "Triadic embeddedness structure in family networks predicts mobile communication response to a sudden natural disaster," Nature Communications, Nature, vol. 12(1), pages 1-12, December.

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