Measuring Interdependence: Specialization and Trade Motifs

Manuel Flores ()

No 326, Documentos de Trabajo (working papers) from Department of Economics - dECON

Abstract: Most empirical measures of economic interdependence rely on aggregate trade values, obscuring the architecture of who trades what with whom. This paper introduces a network-based framework that measures the structure of interdependence through product-level “trade motifs”. By defining exporter and importer roles within a bipartite country–product network, we derive conditional probabilities that separate the structural potential for exchange (complementarity and similarity) from its realization and from third-country interactions. The framework operationalizes classic political-economy concepts. It measures vulnerability not via partner concentration, but via the scarcity of “exit options” (substitutability), and it distinguishes latent similarity from active rivalry in specific third markets. Using harmonized data for 1995–2024, we show that structural similarity predicts WTO disputes only when competitors collide in particular destinations. An application to the US–China dyad reveals a pattern of “systemic rivalry”: bilateral structural complementarity has eroded even as competition in third markets has intensified. The resulting indicators offer a granular toolkit for analyzing the changing architecture of global economic statecraft.

Keywords: trade patterns; trade rivalry; trade substitutability; trade complementarity; trade network. (search for similar items in EconPapers)
JEL-codes: F14 F51 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ude:wpaper:0326

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