Scale-Free Networks in International Trade

Thushyanthan Baskaran and Tilman Brück

No 493, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: The paper analyzes the network structure of international trade. Adapting a network approach developed in the physical sciences, we propose that international trade functions like a scale-free network. For each commodity group we calculate a characteristic parameter which reflects the structure of its trading network. We then insert this variable into an expanded gravity model to explore the effect of the network structure on the value of bilateral trade. The estimation suggests that, inter alia, globalization has reduced the value of trade per product group.

Keywords: Networks; International trade; Gravity model (search for similar items in EconPapers)
JEL-codes: F10 F15 L14 (search for similar items in EconPapers)
Pages: 27 p.
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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