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The rise of China in the international trade network: a community core detection approach

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  • Zhen Zhu

    ()
    (IMT Lucca Institute for Advanced Studies)

  • Federica Cerina

    (IMT Lucca Institute for Advanced Studies)

  • Alessandro Chessa

    ()
    (IMT Lucca Institute for Advanced Studies)

  • Guido Caldarelli

    ()
    (IMT Lucca Institute for Advanced Studies)

  • Massimo Riccaboni

    ()
    (IMT Lucca Institute for Advanced Studies)

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    Abstract

    Theory of complex networks proved successful in the description of a variety of static networks ranging from biology to computer and social sciences to economics and finance. Here we use network models to describe the evolution of a particular economic system, namely the International Trade Network (ITN). Previous studies often assume that globalization and regionalization in international trade are contradictory to each other. We re-examine the relationship between globalization and regionalization by viewing the international trade system as an interdependent complex network. We use the modularity optimization method to detect communities and community cores in the ITN during the years 1995-2011. We find rich dynamics over time both inter- and intra-communities. Most importantly, we have a multilevel description of the evolution where the global dynamics (i.e., communities disappear or reemerge) tend to be correlated with the regional dynamics (i.e., community core changes between community members). In particular, the Asia-Oceania community disappeared and reemerged over time along with a switch in leadership from Japan to China. Moreover, simulation results show that the global dynamics can be generated by a preferential attachment mechanism both inter- and intra- communities.

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    File URL: http://eprints.imtlucca.it/2192/1/EIC_WP_4_2014.pdf
    File Function: First version, 2014
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    Bibliographic Info

    Paper provided by IMT Institute for Advanced Studies Lucca in its series Working Papers with number 4/2014.

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    Length: 20 pages
    Date of creation: Apr 2014
    Date of revision: Apr 2014
    Handle: RePEc:ial:wpaper:4/2014

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    Keywords: Complex Networks; International Trade; Community Detection;

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    References

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    1. Carrere, Celine, 2006. "Revisiting the effects of regional trade agreements on trade flows with proper specification of the gravity model," European Economic Review, Elsevier, vol. 50(2), pages 223-247, February.
    2. Massimo Riccaboni & Alessandro Rossi & Stefano Schiavo, 2013. "Global networks of trade and bits," Journal of Economic Interaction and Coordination, Springer, vol. 8(1), pages 33-56, April.
    3. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
    4. Mansfield, Edward D. & Milner, Helen V., 1999. "The New Wave of Regionalism," International Organization, Cambridge University Press, vol. 53(03), pages 589-627, June.
    5. Prema-chandra Athukorala, 2005. "Product Fragmentation and Trade Patterns in East Asia," Asian Economic Papers, MIT Press, vol. 4(3), pages 1-27, October.
    6. Luca De Benedictis & Lucia Tajoli, 2009. "The World Trade Network," Working Papers 51-2009, Macerata University, Department of Finance and Economic Sciences, revised Mar 2009.
    7. Athukorala, Prema-chandra & Yamashita, Nobuaki, 2006. "Production fragmentation and trade integration: East Asia in a global context," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 233-256, December.
    8. Georgios E. Chortareas & Theodore Pelagidis, 2004. "Trade flows: a facet of regionalism or globalisation?," Cambridge Journal of Economics, Oxford University Press, vol. 28(2), pages 253-271, March.
    9. I. Tzekina & K. Danthi & D. Rockmore, 2008. "Evolution of community structure in the world trade web," The European Physical Journal B - Condensed Matter and Complex Systems, Springer, vol. 63(4), pages 541-545, June.
    10. Arribas, Iván & Pérez, Francisco & Tortosa-Ausina, Emili, 2009. "Measuring Globalization of International Trade: Theory and Evidence," World Development, Elsevier, vol. 37(1), pages 127-145, January.
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