Discovering Preferential Patterns in Sectoral Trade Networks

We analyze the patterns of import/export bilateral relations, with the aim of assessing the relevance and shape of “preferentiality” in countries’ trade decisions. Preferentiality here is defined as the tendency to concentrate trade on one or few partners. With this purpose, we adopt a systemic approach through the use of the tools of complex network analysis. In particular, we apply a pattern detection approach based on community and pseudocommunity analysis, in order to highlight the groups of countries within which most of members’ trade occur. The method is applied to two intra-industry trade networks consisting of 221 countries, relative to the low-tech “Textiles and Textile Articles” and the high-tech “Electronics” sectors for the year 2006, to look at the structure of world trade before the start of the international financial crisis. It turns out that the two networks display some similarities and some differences in preferential trade patterns: they both include few significant communities that define narrow sets of countries trading with each other as preferential destinations markets or supply sources, and they are characterized by the presence of similar hierarchical structures, led by the largest economies. But there are also distinctive features due to the characteristics of the industries examined, in which the organization of production and the destination markets are different. Overall, the extent of preferentiality and partner selection at the sector level confirm the relevance of international trade costs still today, inducing countries to seek the highest efficiency in their trade patterns.