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Virtual Water Trade and Country Vulnerability: A network perspective

Listed author(s):
  • Martina Sartori
  • Stefano Schiavo

We analyze the link between virtual water trade, that is, the flow of water embodied in the international trade of agricultural goods, and vulnerability to external shocks from the vantage point of network analysis. While a large body of work has shown that virtual water trade can enhance water saving on a global scale, being especially beneficial to arid countries, there are increasing concerns that more openness makes countries more dependent on foreign food suppliers and especially more susceptible to external shocks. Our evidence reveals that the increased globalization witnessed in the last 30 years is not associated with the increased frequency of adverse shocks (in either precipitation or food production). Furthermore, building on recent advances in network analysis that connect the stability of a complex system to the interaction between the distribution of shocks and the network topology, we find that the world is more interconnected, but not necessarily less stable.

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File URL: ftp://ftp.unibocconi.it/pub/RePEc/bcu/papers/iefewp73.pdf
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Paper provided by IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy in its series IEFE Working Papers with number 73.

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Length: 45 pages
Date of creation: 2014
Handle: RePEc:bcu:iefewp:iefewp73
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  1. Giorgio Fagiolo & Javier Reyes & Stefano Schiavo, 2010. "The evolution of the world trade web: a weighted-network analysis," Journal of Evolutionary Economics, Springer, vol. 20(4), pages 479-514, August.
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  6. Roberto Roson & Martina Sartori, 2010. "Water Scarcity and Virtual Water Trade in the Mediterranean," Working Papers 2010_08, Department of Economics, University of Venice "Ca' Foscari".
  7. Aldaya, M.M. & Allan, J.A. & Hoekstra, A.Y., 2010. "Strategic importance of green water in international crop trade," Ecological Economics, Elsevier, vol. 69(4), pages 887-894, February.
  8. Fabio Caccioli & Thomas A. Catanach & J. Doyne Farmer, 2012. "Heterogeneity, Correlations And Financial Contagion," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 15(su), pages 1-15.
  9. Aizenman, Joshua, 2008. "On the hidden links between financial and trade opening," Journal of International Money and Finance, Elsevier, vol. 27(3), pages 372-386, April.
  10. Velazquez, Esther, 2007. "Water trade in Andalusia. Virtual water: An alternative way to manage water use," Ecological Economics, Elsevier, vol. 63(1), pages 201-208, June.
  11. de Fraiture, Charlotte & Cai, X & Amarasinghe, Upali & Rosegrant, M. & Molden, David, 2004. "Does international cereal trade save water?: the impact of virtual water trade on global water use," IWMI Research Reports H035342, International Water Management Institute.
  12. Daron Acemoglu & Asuman Ozdaglar & Alireza Tahbaz-Salehi, 2013. "The Network Origins of Large Economic Downturns," NBER Working Papers 19230, National Bureau of Economic Research, Inc.
  13. Krzysztof Burnecki & Rafal Weron, 2006. "Visualization tools for insurance risk processes," HSC Research Reports HSC/06/06, Hugo Steinhaus Center, Wroclaw University of Technology.
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