International trade and financial integration: a weighted network analysis

Stefano Schiavo, Javier Reyes and Giorgio Fagiolo ()

Quantitative Finance, 2010, vol. 10, issue 4, 389-399

Abstract: The authors analyse patterns of international trade and financial integration using complex network analysis. The combination of both binary and weighted approaches delivers more precise and thorough insights into the topological structure and properties of international trade and financial networks (ITN and IFN). It is found that the ITN is more densely connected than the IFN, while both types of network display a core-periphery structure. This hierarchical organization is more pronounced in financial markets, suggesting that the bulk of trade in financial assets occurs through a handful of countries acting as hubs. High-income countries are better linked and form groups of tightly interconnected nodes. This kind of structure can explain why the recent financial crisis has spread rapidly among advanced countries while reaching emerging markets only in a second phase.

Keywords: International integration; International financial markets; Globalization; Complex weighted networks (search for similar items in EconPapers)
Date: 2010
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Related works:
Working Paper: International Trade and Financial Integration: a Weighted Network Analysis (2007)
Working Paper: International Trade and Financial Integration: a Weighted Network Analysis (2007)
Working Paper: International Trade and Financial Integration: a Weighted Network Analysis (2007)
Working Paper: International Trade and Financial Integration: A Weighted Network Analysis (2007)
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DOI: 10.1080/14697680902882420

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