Scale-Free Networks in International Trade
AbstractThe paper analyzes the network structure of international trade. Adapting a network approach developed in the physical sciences, we propose that international trade functions like a scale-free network. For each commodity group we calculate a characteristic parameter which reflects the structure of its trading network. We then insert this variable into an expanded gravity model to explore the effect of the network structure on the value of bilateral trade. The estimation suggests that, inter alia, globalization has reduced the value of trade per product group.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 493.
Length: 27 p.
Date of creation: 2005
Date of revision:
Networks; International trade; Gravity model;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F15 - International Economics - - Trade - - - Economic Integration
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
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