The Evolution of the World Trade Web
This paper empirically studies the statistical properties of the world trade web (WTW) and its evolution over time using a weighted network approach. Previous works have characterized the WTW as a binary network, where countries play the role of nodes and a link is in place between any two countries if there exists a sufficiently large amount of trade between them. On the contrary, we exploit the heterogeneity of trade relationships and weight each existing link by some measure of the actual amount of trade carried through that link. Our results indicate that the WTW is a strongly symmetric network, where the majority of trade relationships (and their intensities) are reciprocated. We also find that: (i) the majority of countries hold many weak trade relationships and coexist with a few countries holding less but more intense export relationships; (ii) countries that hold more intense trade relationships preferably trade with poorly-connected countries, but are typically more clustered; (iii) rich countries tend to form more intense trade links and to be more clustered. Furthermore, all structural properties of the WTW display a remarkable stationarity across years. From a methodological point of view, our paper suggests that a weighted network approach is able to provide more precise conclusions than a binary analysis. Many implications that are indeed valid in binary networks are reversed in our weighted analysis. Finally, we show that all our main results are robust to alternative weighting procedures.
|Date of creation:||16 Jul 2007|
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- D. Garlaschelli & M. I. Loffredo, 2005. "Structure and Evolution of the World Trade Network," Papers physics/0502066, arXiv.org, revised May 2005.
- Dorogovtsev, S.N. & Mendes, J.F.F., 2003. "Evolution of Networks: From Biological Nets to the Internet and WWW," OUP Catalogue, Oxford University Press, number 9780198515906, March.
- D. Garlaschelli & M. I. Loffredo, 2004. "Fitness-dependent topological properties of the World Trade Web," Papers cond-mat/0403051, arXiv.org, revised Oct 2004.
- Li, Xiang & Ying Jin, Yu & Chen, Guanrong, 2003. "Complexity and synchronization of the World trade Web," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 328(1), pages 287-296.
- Barthélemy, Marc & Barrat, Alain & Pastor-Satorras, Romualdo & Vespignani, Alessandro, 2005. "Characterization and modeling of weighted networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 346(1), pages 34-43.
- Garlaschelli, Diego & Loffredo, Maria I., 2005. "Structure and evolution of the world trade network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 355(1), pages 138-144.
- Raja Kali & Javier Reyes, 2010. "Financial Contagion On The International Trade Network," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 1072-1101, October.
- repec:ebl:ecbull:v:3:y:2006:i:34:p:1-12 is not listed on IDEAS
- Raja Kali & Javier Reyes, 2007. "The architecture of globalization: a network approach to international economic integration," Journal of International Business Studies, Palgrave Macmillan, vol. 38(4), pages 595-620, July.
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