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The Network Structure of International Trade

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  • Thomas Chaney

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

Abstract

Motivated by empirical evidence I uncover on the dynamics of French firms' exports, I offer a novel theory of trade frictions. Firms export only into markets where they have a contact. They search directly for new trading partners, but also use their existing network of contacts to search remotely for new partners. I characterize the dynamic formation of an international network of exporters in this model. Structurally, I estimate this model on French data and confirm its predictions regarding the distribution of the number of foreign markets accessed by exporters and the geographic distribution of exports.

Suggested Citation

  • Thomas Chaney, 2014. "The Network Structure of International Trade," SciencePo Working papers Main hal-03579668, HAL.
    • Handle: RePEc:hal:spmain:hal-03579668
    DOI: 10.1257/aer.104.11
    Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-03579668
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    References listed on IDEAS

    as
    1. Thomas Chaney, 2014. "The Network Structure of International Trade," American Economic Review, American Economic Association, vol. 104(11), pages 3600-3634, November.
    2. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    3. Konrad B. Burchardi & Tarek A. Hassan, 2013. "The Economic Impact of Social Ties: Evidence from German Reunification," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 1219-1271.
    4. Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2005. "The trade-creating effects of business and social networks: evidence from France," Journal of International Economics, Elsevier, vol. 66(1), pages 1-29, May.
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    7. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 369-405.
    8. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
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    10. Krugman, Paul, 1987. "The narrow moving band, the Dutch disease, and the competitive consequences of Mrs. Thatcher : Notes on trade in the presence of dynamic scale economies," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 41-55, October.
    11. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," SciencePo Working papers Main hal-03579844, HAL.
    12. Costas Arkolakis, 2010. "Market Penetration Costs and the New Consumers Margin in International Trade," Journal of Political Economy, University of Chicago Press, vol. 118(6), pages 1151-1199.
    13. repec:hal:spmain:info:hdl:2441/7an8r1ubqs93caeqs80puld0tp is not listed on IDEAS
    14. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-1721, September.
    15. Dmitriev, Mikhail & Comin, Diego & Rossi-Hansberg, Esteban, 2012. "The Spatial Diffusion of Technology," CEPR Discussion Papers 9208, C.E.P.R. Discussion Papers.
    16. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
    17. Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2005. "The trade-creating effects of business and social networks: evidence from France," Journal of International Economics, Elsevier, vol. 66(1), pages 1-29, May.
    18. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    19. repec:hal:spmain:info:hdl:2441/6apm7lruv088iagm4rv2c33jtg is not listed on IDEAS
    20. Avinash Dixit, 1989. "Hysteresis, Import Penetration, and Exchange Rate Pass-Through," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(2), pages 205-228.
    21. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," SciencePo Working papers hal-03579844, HAL.
    22. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," Post-Print hal-03579844, HAL.
    23. Panle Jia, 2008. "What Happens When Wal-Mart Comes to Town: An Empirical Analysis of the Discount Retailing Industry," Econometrica, Econometric Society, vol. 76(6), pages 1263-1316, November.
    24. Matthew O. Jackson & Brian W. Rogers, 2007. "Meeting Strangers and Friends of Friends: How Random Are Social Networks?," American Economic Review, American Economic Association, vol. 97(3), pages 890-915, June.
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    Cited by:

    1. Pisch, Frank & Berlingieri, Giuseppe, 2022. "Managing Export Complexity: The Role of Service Outsourcing," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 135680, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    2. Fan, Haichao & Li, Chang & Xue, Chang & Yu, Miaojie, 2023. "Clan culture and patterns of industrial specialization in China," Journal of Economic Behavior & Organization, Elsevier, vol. 207(C), pages 457-478.
    3. Jing Li & Hongkui Liu & Qian Xie, 2023. "Bilateral Relations and Exports: Evidence from Google Big Data," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(1), pages 182-210, January.
    4. Srhoj Stjepan & Vitezić Vanja & Wagner Joachim, 2023. "Export Boosting Policies and Firm Performance: Review of Empirical Evidence Around the World," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 243(1), pages 45-92, February.
    5. Hintermann, Beat & Ludwig, Markus, 2023. "Home country bias in international emissions trading: Evidence from the EU ETS," Resource and Energy Economics, Elsevier, vol. 71(C).
    6. Lee, Woori & Mulabdic, Alen & Ruta, Michele, 2023. "Third-country effects of regional trade agreements: A firm-level analysis," Journal of International Economics, Elsevier, vol. 140(C).
    7. Clemence Lenoir & Isabelle Mejean & Julien Martin, 2018. "Search Frictions in International Good Markets," 2018 Meeting Papers 878, Society for Economic Dynamics.
    8. ARA Tomohiro, 2023. "Trade with Search Frictions: Identifying New Gains from Trade," Discussion papers 23061, Research Institute of Economy, Trade and Industry (RIETI).
    9. Jules Depersin & B'ereng`ere Patault, 2023. "Revisiting the effect of search frictions on market concentration," Papers 2303.01824, arXiv.org.
    10. Boitier, Vincent, 2022. "Why do similar firms export differently?," Research in Economics, Elsevier, vol. 76(4), pages 373-385.
    11. Jiang, Zhengyang & Richmond, Robert J., 2023. "Origins of international factor structures," Journal of Financial Economics, Elsevier, vol. 147(1), pages 1-26.
    12. Tomohiro Ara, 2023. "Trade with Search Frictions: Identifying New Gains from Trade," TUPD Discussion Papers 42, Graduate School of Economics and Management, Tohoku University.
    13. Zhao, Longfeng & Yang, Yajie & Bai, Xiao & Chen, Lin & Lu, An-Liang & Zhang, Xin & Chen, Wei-Qiang, 2023. "Structure, robustness and supply risk in the global wind turbine trade network," Renewable and Sustainable Energy Reviews, Elsevier, vol. 177(C).
    14. Pierre Cotterlaz, 2021. "Three essays on spatial frictions [Trois essais sur les frictions spatiales]," SciencePo Working papers Main tel-03436173, HAL.

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