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J Econ Interact Coord (2010) 5:125
DOI 10.1007/s11403-010-0061-y
REGULAR ARTICLE
Received: 28 October 2009 / Accepted: 26 February 2010 / Published online: 13 March 2010 Springer-Verlag 2010
Abstract This paper begins to explore the determinants of the topological properties of the international-trade network (ITN). We t bilateral-trade ows using a standard gravity equation to build a residual ITN where trade-link weights are depurated from geographical distance, size, border effects, trade agreements, and so on. We then compare the topological properties of the original and residual ITNs. We nd that the residual ITN displays, unlike the original one, marked signatures of a complex system, and is characterized by a very different topological architecture. Whereas the original ITN is geographically clustered and organized around a few large-sized hubs, the residual ITN displays many small-sized but trade-oriented countries that, independently of their geographical position, either play the role of local hubs or attract large and rich countries in relatively complex trade-interaction patterns.
Keywords International trade network Gravity equation Weighted network
analysis Topological properties Econophysics
JEL Classication F10 D85
1 Introduction
The last years have witnessed the emergence of a large body of contributions addressing international-trade issues from a complex-network perspective (Li et al. 2003; Serrano and Bogu 2003; Garlaschelli and Loffredo 2004, 2005; Reichardt and White 2007; Serrano et al. 2007; Bhattacharya et al. 2008, 2007,Garlaschelli et al. 2007;
G. Fagiolo (B)
SantAnna School of Advanced Studies, Laboratory of Economics and Management, Piazza Martiri della Libert 33, I-56127 Pisa, Italye-mail: [email protected]
The international-trade network: gravity equations and topological properties
Giorgio Fagiolo
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2 G. Fagiolo
Tzekina et al. 2008; Fagiolo et al. 2008; Fagiolo et al. 2009b; Reyes et al. 2008). The International trade network (ITN), aka World-trade web (WTW) or World-trade network (WTN), is dened as the graph of import/export relationships between world countries in a given year.
Understanding the topological properties of the ITN from a complex-network perspective (Albert and Barabsi 2002; Dorogovtsev and Mendes 2003), and their evolution over time, acquires a fundamental importance in explaining issues such as economic globalization and internationalization, the spreading of international crises, and the transmission of economic shocks (Helliwell and Padmore 1985; Artis et al. 2003; Forbes 2002). Indeed, the standard approach to the empirics of international-trade employs...