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Discovering Preferential Patterns in Sectoral Trade Networks

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  • Isabella Cingolani
  • Carlo Piccardi
  • Lucia Tajoli
Abstract
We analyze the patterns of import/export bilateral relations, with the aim of assessing the relevance and shape of “preferentiality” in countries’ trade decisions. Preferentiality here is defined as the tendency to concentrate trade on one or few partners. With this purpose, we adopt a systemic approach through the use of the tools of complex network analysis. In particular, we apply a pattern detection approach based on community and pseudocommunity analysis, in order to highlight the groups of countries within which most of members’ trade occur. The method is applied to two intra-industry trade networks consisting of 221 countries, relative to the low-tech “Textiles and Textile Articles” and the high-tech “Electronics” sectors for the year 2006, to look at the structure of world trade before the start of the international financial crisis. It turns out that the two networks display some similarities and some differences in preferential trade patterns: they both include few significant communities that define narrow sets of countries trading with each other as preferential destinations markets or supply sources, and they are characterized by the presence of similar hierarchical structures, led by the largest economies. But there are also distinctive features due to the characteristics of the industries examined, in which the organization of production and the destination markets are different. Overall, the extent of preferentiality and partner selection at the sector level confirm the relevance of international trade costs still today, inducing countries to seek the highest efficiency in their trade patterns.

Suggested Citation

  • Isabella Cingolani & Carlo Piccardi & Lucia Tajoli, 2015. "Discovering Preferential Patterns in Sectoral Trade Networks," PLOS ONE, Public Library of Science, vol. 10(10), pages 1-16, October.
    • Handle: RePEc:plo:pone00:0140951
    DOI: 10.1371/journal.pone.0140951
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    References listed on IDEAS

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    1. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
    2. David Hummels, 2007. "Transportation Costs and International Trade in the Second Era of Globalization," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 131-154, Summer.
    3. Gordon H. Hanson, 2012. "The Rise of Middle Kingdoms: Emerging Economies in Global Trade," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 41-64, Spring.
    4. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 441-487.
    5. Kei-Mu Yi, 2003. "Can Vertical Specialization Explain the Growth of World Trade?," Journal of Political Economy, University of Chicago Press, vol. 111(1), pages 52-102, February.
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    Cited by:

    1. Hao, Xiaoqing & An, Haizhong, 2022. "Comparative study on transmission mechanism of supply shortage risk in the international trade of iron ore, pig iron and crude steel," Resources Policy, Elsevier, vol. 79(C).
    2. Isabella Cingolani & Lelio Iapadre & Lucia Tajoli, 2018. "International production networks and the world trade structure," International Economics, CEPII research center, issue 153, pages 11-33.
    3. Jan Hagemejer & Jan Jakub Michałek & Karolina Pawlak, 2021. "Trade Implications of the Transatlantic Trade and Investment Partnership for Poland’s Agri-Food Trade," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 13(1), pages 75-103, March.
    4. Chunjiao Yu & Ren Zhang & Lian An & Zhixing Yu, 2020. "Has China’s Belt and Road Initiative Intensified Bilateral Trade Links between China and the Involved Countries?," Sustainability, MDPI, vol. 12(17), pages 1-19, August.
    5. Olivera Kostoska & Sonja Mitikj & Petar Jovanovski & Ljupco Kocarev, 2020. "Core-periphery structure in sectoral international trade networks: A new approach to an old theory," PLOS ONE, Public Library of Science, vol. 15(4), pages 1-24, April.

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