Network Analysis of World Trade using the BACI-CEPII Dataset

Abstract

HighlightsThis paper explores the World Trade using the Network Analysis and introduces the reader to some of the techniques used to visualize, calculate and synthetically represent network trade data. The paper shows different visualizations of the network and describe its topological properties, producing and discussing some of the commonly used Network's statistics, and presenting some specific topics. All in all, this paper shows that Network Analysis is a useful tool to describe bilateral trade relations among countries when interdependence matters, and when trade relations are characterized by high dimensionality and strong heterogeneity. AbstractIn this paper we explore the BACI-CEPII database using Network Analysis. Starting from the visualization of the World Trade Network, we then define and describe the topology of the network, both in its binary version and in its weighted version, calculating and discussing some of the commonly used network's statistics. We finally discuss some specific topics that can be studied using Network Analysis and International Trade data, both at the aggregated and sectoral level. The analysis is done using multiple software (Stata, R, and Pajek). The scripts to replicate part of the analysis are included in the appendix, and can be used as an handson tutorial. Moreover,the World Trade Network local and global centrality measures, for the unweighted and the weighted version of the Network, calculated using the bilateral aggregate trade data for each country (178 in total) and each year (from 1995 to 2010,) can be downloaded from the CEPII webpage.JEL Classification: F10

Networks of Value‐added Trade

“…Similarly, De Benedictis et al. () describe the topology of the WTW in its binary and weighted versions by calculating and discussing a number of network statistics. Other authors have used network analysis to examine how trade in specific sectors has evolved over time.…”

The evolution of world trade from 1995 to 2014 : a network approach

“…Nevertheless, the literature is not that abundant. The most influential research we are aware of are Serrano and Boguñá (2003), Kali and Reyes (2007), Fagiolo et al (2010), Barigozzi et al (2010), De Benedictis and Tajoli (2011), Maeng et al (2012), and De Benedictis et al (2013. Serrano and Boguñá (2003) present an empirical characterization of the WTN -which they claim is the first of its kind.…”

“…De Benedictis and Tajoli (2013) use International Monetary Fund's trade dataset for six years, corresponding to six decades (i.e. 1950, 1960, 1970 … 2000).…”

The Trade Competitiveness of Southern Emerging Economies: A Multidimensional Approach Through Cluster Analysis

“…To address this issue, an increasing interest in network analysis (NA) is being shown by scholars (see, more recently, De Benedictis and Tajoli, ; De Benedictis et al., ). The benefit of representing a network of trade flows is to give emphasis to the relationship between the countries in the network and the structure of the network itself.…”

“…Other existing cluster analyses applications focus mainly on monetary integration (see, among others, Artis and Zhang, 2002;Boreiko, 2003;B enassy-Qu er e and Coupet, 2005;Tsangarides and Qureshi, 2008). Previous 1 To address this issue, an increasing interest in network analysis (NA) is being shown by scholars (see, more recently, De Benedictis and Tajoli, 2011;De Benedictis et al, 2013). The benefit of representing a network of trade flows is to give emphasis to the relationship between the countries in the network and the structure of the network itself.…”