Scale-Free Networks in International Trade
The 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.
|Date of creation:||2005|
|Contact details of provider:|| Postal: Mohrenstraße 58, D-10117 Berlin|
Web page: http://www.diw.de/en
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wilhite, Allen, 2001. "Bilateral Trade and 'Small-World' Networks," Computational Economics, Springer;Society for Computational Economics, vol. 18(1), pages 49-64, August.
- Laszlo Matyas, 1997. "Proper Econometric Specification of the Gravity Model," The World Economy, Wiley Blackwell, vol. 20(3), pages 363-368, 05.
- Rauch, James E., 1999.
"Networks versus markets in international trade,"
Journal of International Economics,
Elsevier, vol. 48(1), pages 7-35, June.
- James E. Rauch, 1996. "Networks versus Markets in International Trade," NBER Working Papers 5617, National Bureau of Economic Research, Inc.
- Egger, Peter, 2000. "A note on the proper econometric specification of the gravity equation," Economics Letters, Elsevier, vol. 66(1), pages 25-31, January.
- Peter Egger, "undated". "A Note on the Proper Econometric Specification of the Gravity Equation," WIFO Working Papers 108, WIFO.
- Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March. Full references (including those not matched with items on IDEAS)