Modeling the International-Trade Network: A Gravity Approach

Marco Duenas and Giorgio Fagiolo ()

LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy

Abstract: This paper investigates whether the gravity model (GM) can explain the statistical properties of the International Trade Network (ITN). We fit data on international-trade flows with a GM specification using alternative fitting techniques and we employ GM estimates to build a weighted predicted ITN, whose topological properties are compared to observed ones. Furthermore, we propose an estimation strategy to predict the binary ITN with a GM. We find that the GM successfully replicates the weighted-network structure of the ITN, only if one fixes its binary architecture equal to the observed one. Conversely, the GM performs very badly when asked to predict the presence of a link, or the level of the trade flow it carries, whenever the binary structure must be simultaneously estimated.

Keywords: International Trade Network; Gravity Equation; Weighted Network Analysis; Topological Properties; Econophysics (search for similar items in EconPapers)
JEL-codes: D85 F10 (search for similar items in EconPapers)
Date: 2011-12-15
New Economics Papers: this item is included in nep-int and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Modeling the International-Trade Network: a gravity approach (2013)
Working Paper: Modeling the International-Trade Network: A Gravity Approach (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ssa:lemwps:2011/25

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