Global Networks of Trade and Bits

Massimo Riccaboni (), Alessandro Rossi () and Stefano Schiavo

No 1108, Department of Economics Working Papers from Department of Economics, University of Trento, Italia

Abstract: Considerable efforts have been made in the recent years to produce detailed topolo- gies of the Internet. While Internet topology data have brought to the attention of a wide and somehow diverse audience of scholars they have been so far over- looked by economic analyses. In this paper we suggest that such data could be effectively treated as a proxy to characterize the size of the �digital economy� ac- tivities at national country level: we therefore analyze the topological structure of the network of trade in digital services (trade in bits) and compare it with that of the more traditional flow of manufactured goods across countries. To perform a meaningful comparison across networks with different characteristics we define a common null model for the number of connections among each country-pair, based on the hypergeometric distribution. Original data are thus filtered using different thresholds so that we focus our attention on the strongest links only, i.e., on links the represent a significant departure from the stochastic benchmark. We find that trade in bits displays a more sparse and less hierarchical network structure, which is more similar to trade in high-skill manufactured goods than total trade. Last, distance plays a more prominent role in shaping the network of international trade in physical goods than trade in digital services.

Keywords: Internet; hypergeometric; international trade; network analysis; distance (search for similar items in EconPapers)
JEL-codes: F14 L86 O33 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-ict, nep-int and nep-net
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Journal Article: Global networks of trade and bits (2013)
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