World trade concentration and product market segregation

A. Gnidchenko
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A. Gnidchenko: Center for Macroeconomic Analysis and Short-Term Forecasting; Institute of Economic Forecasting of the Russian Academy of Sciences, Moscow, Russia

Journal of the New Economic Association, 2025, vol. 66, issue 1, 36-53

Abstract: The article examines the link between countries' trade geographic concentration indices at the product markets, both ignoring and accounting for differentiation by partners. I apply CEPII BACI data on trade by 4-digit HS products for 2022. Concentration is interpreted as market power of supplying or purchasing countries, the difference between concentration by suppliers and purchasers is regarded as relative market power of suppliers, and the combination of high bilateral trade flows concentration and moderate or low unilateral trade flows concentration marks product market segregation. The rate of suppliers' dominance depends on export diversification (effective number of suppliers), with a negative sign, and on import diversification (effective number of markets) and the rate of purchasers' dominance, with a positive sign. Products are put into three clusters by the k-means method, relying on concentration indices and their linear combinations (relative market power of suppliers and product market segregation). High diversification is typical for the first cluster; for the second one, concentration by suppliers is high, while being moderate by purchasers; for the third cluster, concentration is high for both suppliers and purchasers, with the dominance of the market power of the latter.

Keywords: concentration; world trade; marker segregation; product (search for similar items in EconPapers)
JEL-codes: C38 C43 F14 L10 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2025:i:66:p:36-53

DOI: 10.31737/22212264_2025_1_36-53

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