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Global networks of trade and bits

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Author Info

  • Massimo Riccaboni

    ()

  • Alessandro Rossi

    ()

  • Stefano Schiavo

    ()

Abstract

Considerable efforts have been made in recent years to produce detailed topologies of the Internet, but so far these data have been overlooked by economists. In this paper, we suggest that such information could be used to characterize both the size of the digital economy and outsourcing at country level. We analyse the topological structure of the network of trade in digital services (trade in bits) and compare it with the more traditional flow of manufactured goods across countries. To perform meaningful comparisons across networks with different characteristics, we define a stochastic benchmark for the number of connections among each country-pair, based on hypergeometric distribution. Original data are filtered so that we only focus on the strongest, i.e. statistically significant, links. We find that trade in bits displays a sparser and less hierarchical network structure, which is more similar to trade in high-skill manufactured goods than total trade. Moreover, distance plays a more prominent role in shaping the network of international trade in physical goods than trade in digital services. Copyright Springer-Verlag 2013

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File URL: http://hdl.handle.net/10.1007/s11403-012-0101-x
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Bibliographic Info

Article provided by Springer in its journal Journal of Economic Interaction and Coordination.

Volume (Year): 8 (2013)
Issue (Month): 1 (April)
Pages: 33-56

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Handle: RePEc:spr:jeicoo:v:8:y:2013:i:1:p:33-56

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Web page: http://www.springer.com/economics/economic+theory/journal/11403

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Related research

Keywords: Internet; International trade; Network analysis; Distance; Outsourcing; Hypergeometric; F14; L86; O33;

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References

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Cited by:
  1. Paolo Sgrignoli & Rodolfo Metulini & Stefano Schiavo & Massimo Riccaboni, 2013. "The Relation Between Global Migration and Trade Networks," Working Papers 6/2013, IMT Institute for Advanced Studies Lucca, revised Oct 2013.

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