Virtual Water Trade and Country Vulnerability: A network perspective

Martina Sartori and Stefano Schiavo

No 73, IEFE Working Papers from IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy

Abstract: We analyze the link between virtual water trade, that is, the flow of water embodied in the international trade of agricultural goods, and vulnerability to external shocks from the vantage point of network analysis. While a large body of work has shown that virtual water trade can enhance water saving on a global scale, being especially beneficial to arid countries, there are increasing concerns that more openness makes countries more dependent on foreign food suppliers and especially more susceptible to external shocks. Our evidence reveals that the increased globalization witnessed in the last 30 years is not associated with the increased frequency of adverse shocks (in either precipitation or food production). Furthermore, building on recent advances in network analysis that connect the stability of a complex system to the interaction between the distribution of shocks and the network topology, we find that the world is more interconnected, but not necessarily less stable.

Keywords: virtual water trade; vulnerability; complex network; shocks. (search for similar items in EconPapers)
JEL-codes: F14 F18 Q25 Q56 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2014
New Economics Papers: this item is included in nep-agr and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Virtual water trade and country vulnerability: A network perspective (2014)
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