IDEAS home Printed from https://ideas.repec.org/p/ekd/009007/9578.html

Inter-city Trade Networks in Turkey: Shocks and Spillovers

Author

Listed:
  • Alper Duman

Abstract

Trade among the cities of a country is similar to international trade in various aspects. Recently there is a surge of studies focusing on the network characteristics of international trade. We extend the main idea and the methodology of these studies to the inter-city trade network in Turkey in order to model and trace the network spillovers of a given shock (i.e. intensification of Syrian conflict and hence the drop of income in Southeastern cities) on the overall income and intercity trade volume. ntercity trade can be considered as a network. This trade network can be represented as a directed, weighted, incomplete, and asymmetric graph in which each city is a node and the bilateral trade links are the edges. The network is directed as each city is unlikely to trade at equal amounts from each other. The network is weighted because all links reflect some value of payment that is different for each city and each flow. The network is incomplete as not all cities in Turkey are connected with each other through trade. Finally, the network is asymmetric because for most cities customer partners (out-links) differs from the number of supplier partners (in-links). The ministry of Science, Technology and Industry provides intercity trade data for the year 2013. First we construct the intercity trade network derived from the data. Second we follow, Kireyev and Leonidev (2015) method to model and trace the network spillovers of a given shock (i.e. intensification of Syrian conflict and hence the drop of income in Southeastern cities) on the overall income and intercity trade volume. The main insight of the network modelling approach is the following. Once a source city faces a shock in terms of income loss, its purchases from its first neighbour cities will be affected. Then the these cities will face adverse effects in terms of income and so their neighbour cities will have to bear the spillover effects. This network contagion will have an aggregate effect which will be larger than the direct effect. Ten percent drop in income of the Southeastern cities which constitute about 10 % of the GDP of Turkey will have a significant effect on the overall income and inter-city trade volume in Turkey

Suggested Citation

  • Alper Duman, 2016. "Inter-city Trade Networks in Turkey: Shocks and Spillovers," EcoMod2016 9578, EcoMod.
    • Handle: RePEc:ekd:009007:9578
    as

    Download full text from publisher

    File URL: http://ecomod.net/system/files/Duman.ICTN%20EcoMod%20Lisbon.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alexei Kireyev & Andrei Leonidov, 2018. "Network Effects of International Shocks and Spillovers," Networks and Spatial Economics, Springer, vol. 18(4), pages 805-836, December.
    2. Vasco M. Carvalho, 2014. "From Micro to Macro via Production Networks," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 23-48, Fall.
    3. repec:bof:bofrdp:urn:nbn:fi:bof-201512101464 is not listed on IDEAS
    4. Vasco M. Carvalho, 2015. "From Micro to Macro via Production Networks," Working Papers 793, Barcelona School of Economics.
    5. Daron Acemoglu & Ufuk Akcigit & William Kerr, 2016. "Networks and the Macroeconomy: An Empirical Exploration," NBER Macroeconomics Annual, University of Chicago Press, vol. 30(1), pages 273-335.
    6. Xavier Gabaix, 2011. "The Granular Origins of Aggregate Fluctuations," Econometrica, Econometric Society, vol. 79(3), pages 733-772, May.
    7. Giorgio Fagiolo & Marina Mastrorillo, 2014. "Does Human Migration Affect International Trade? A Complex-Network Perspective," PLOS ONE, Public Library of Science, vol. 9(5), pages 1-20, May.
    8. Daron Acemoglu & Ufuk Akcigit & William Kerr, 2016. "Networks and the Macroeconomy: An Empirical Exploration," NBER Macroeconomics Annual, University of Chicago Press, vol. 30(1), pages 273-335.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ernest Liu & Aleh Tsyvinski, 2021. "Dynamical Structure and Spectral Properties of Input-Output Networks," Working Papers 2021-13, Princeton University. Economics Department..
    2. Frohm, Erik & Gunnella, Vanessa, 2017. "Sectoral interlinkages in global value chains: spillovers and network effects," Working Paper Series 2064, European Central Bank.
    3. Becker, Raphael Niklas & Henkel, Marcel, 2020. "The role of key regions in spatial development," DICE Discussion Papers 331, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    4. Vallès Codina, Oriol, 2023. "Business cycles, sectoral price stabilization, and climate change mitigation: A model of multi-sector growth in the tradition of the Bielefeld disequilibrium approach," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 636-653.
    5. Pasten, Ernesto & Schoenle, Raphael & Weber, Michael, 2020. "The propagation of monetary policy shocks in a heterogeneous production economy," Journal of Monetary Economics, Elsevier, vol. 116(C), pages 1-22.
    6. Michael Weber & Ali Ozdagli, 2016. "Monetary Policy Through Production Networks: Evidence from the Stock Market," 2016 Meeting Papers 148, Society for Economic Dynamics.
    7. Glenn Magerman & Karolien De Bruyne & Emmanuel Dhyne & Jan Van Hove, 2016. "Heterogeneous firms and the micro origins of aggregate fluctuations," Working Paper Research 312, National Bank of Belgium.
    8. Pesaran, M. Hashem & Yang, Cynthia Fan, 2020. "Econometric analysis of production networks with dominant units," Journal of Econometrics, Elsevier, vol. 219(2), pages 507-541.
    9. Michael Weber & Ali Ozdagli, 2016. "Monetary Policy Through Production Networks: Evidence from the Stock Market," 2016 Meeting Papers 148, Society for Economic Dynamics.
    10. Peydró, José-Luis & Jiménez, Gabriel & Kenan, Huremovic & Moral-Benito, Enrique & Vega-Redondo, Fernando, 2020. "Production and financial networks in interplay: Crisis evidence from supplier-customer and credit registers," CEPR Discussion Papers 15277, C.E.P.R. Discussion Papers.
    11. Erik Frohm & Vanessa Gunnella, 2021. "Spillovers in global production networks," Review of International Economics, Wiley Blackwell, vol. 29(3), pages 663-680, August.
    12. Mundt, Philipp, 2021. "The formation of input–output architecture: Evidence from the European Union," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 89-104.
    13. Ernesto Pasten & Raphael S. Schoenle & Michael Weber & Michael Weber, 2017. "Price Rigidities and the Granular Origins of Aggregate Fluctuations," CESifo Working Paper Series 6619, CESifo.
    14. Julian Di Giovanni & Galina Hale, 2022. "Stock Market Spillovers via the Global Production Network: Transmission of U.S. Monetary Policy," Journal of Finance, American Finance Association, vol. 77(6), pages 3373-3421, December.
    15. Brancaccio, Emiliano & Giammetti, Raffaele & Lopreite, Milena & Puliga, Michelangelo, 2019. "Monetary policy, crisis and capital centralization in corporate ownership and control networks: A B-Var analysis," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 55-66.
    16. Ernesto Pasten & Raphael Schoenle & Michael Weber, 2017. "Price Rigidity and the Origins of Aggregate Fluctuations," NBER Working Papers 23750, National Bureau of Economic Research, Inc.
    17. João Amador & Sónia Cabral & Rossana Mastrandrea & Franco Ruzzenenti, 2018. "Who’s Who in Global Value Chains? A Weighted Network Approach," Open Economies Review, Springer, vol. 29(5), pages 1039-1059, November.
    18. Chiara Criscuolo & Jonathan Timmis, 2017. "The Relationship Between Global Value Chains and Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 32, pages 61-83, Spring.
    19. Bougheas, Spiros & Harvey, David I. & Kirman, Alan & Nelson, Douglas, 2024. "Systemic risk in banking, fire sales, and macroeconomic disasters," Journal of Economic Dynamics and Control, Elsevier, vol. 168(C).
    20. Grazzini, Jakob & Spelta, Alessandro, 2022. "An empirical analysis of the global input–output network and its evolution," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 594(C).

    More about this item

    Keywords

    ;
    ;
    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ekd:009007:9578. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Theresa Leary (email available below). General contact details of provider: https://edirc.repec.org/data/ecomoea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.