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International Trade and Financial Integration: A Weighted Network Analysis

Author

Listed:
  • Giorgio Fagiolo
  • Javier Reyes
  • Stefano Schiavo

Abstract

In this paper we compare the patterns of trade and financial integration by exploit- ing network analysis. Our results show that, by combining binary and weighted network analysis, it is possible to deliver more precise and thorough insights on the topological structure and properties of the international trade and financial net- works (ITN and IFN). We find that the ITN is more densely connected than the IFN and that the degree of international financial integration varies with asset type. Our results also indicate that richer countries are better linked and form groups of tightly interconnected nodes. This can be seen as a sign of the persistent relevance of local relations. Yet, the growing importance of global links is testified by the disassortative feature of both the ITN and the IFN: poorly connected nodes tend to connect to central ones and use them as hubs to access the rest of the network.

Suggested Citation

  • Giorgio Fagiolo & Javier Reyes & Stefano Schiavo, 2007. "International Trade and Financial Integration: A Weighted Network Analysis," LEM Papers Series 2007/16, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    • Handle: RePEc:ssa:lemwps:2007/16
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    References listed on IDEAS

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    More about this item

    Keywords

    International Trade; International Financial Flows; Globalization; Complex Weighted Networks; Dynamics.;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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