Dataset Information

The rise of China in the International Trade Network: a community core detection approach.

ABSTRACT: Theory of complex networks proved successful in the description of a variety of complex systems ranging from biology to computer science and to economics and finance. Here we use network models to describe the evolution of a particular economic system, namely the International Trade Network (ITN). Previous studies often assume that globalization and regionalization in international trade are contradictory to each other. We re-examine the relationship between globalization and regionalization by viewing the international trade system as an interdependent complex network. We use the modularity optimization method to detect communities and community cores in the ITN during the years 1995-2011. We find rich dynamics over time both inter- and intra-communities. In particular, the Asia-Oceania community disappeared and reemerged over time along with a switch in leadership from Japan to China. We provide a multilevel description of the evolution of the network where the global dynamics (i.e., communities disappear or reemerge) and the regional dynamics (i.e., community core changes between community members) are related. Moreover, simulation results show that the global dynamics can be generated by a simple dynamic-edge-weight mechanism.

SUBMITTER: Zhu Z

PROVIDER: S-EPMC4138169 | biostudies-literature | 2014

REPOSITORIES: biostudies-literature

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The rise of China in the International Trade Network: a community core detection approach.

Zhu Zhen Z Cerina Federica F Chessa Alessandro A Caldarelli Guido G Riccaboni Massimo M

PloS one 20140819 8

Theory of complex networks proved successful in the description of a variety of complex systems ranging from biology to computer science and to economics and finance. Here we use network models to describe the evolution of a particular economic system, namely the International Trade Network (ITN). Previous studies often assume that globalization and regionalization in international trade are contradictory to each other. We re-examine the relationship between globalization and regionalization by ...[more]

PMID: 25136895

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Project description:The research on core-periphery structure of global trade from a complex-network perspective has shown that the world system is hierarchically organized into blocks and that countries play different roles in the world economy. Yet, little attention has been paid to investigating whether the sectoral international trade networks conform to a core-periphery structure, hence what is the role of different levels of processing in creating and maintaining structural inequality. This issue is of particular importance given the contemporary focus upon global production networks and reshaping of the international division of labor. With this in mind, we propose a model (LARDEG) from network science to reexamine old theories in economics, such as core-periphery structures in sectoral international trade networks and test whether the global value chains have changed structural positions in terms of the level of processing. The economic background of our model permitting a more accurate sorting of countries into structural positions and the general stability of results have provided for a more solid measurements than has hereto been possible. Our algorithm naturally produces networks with hierarchically nested block structure obtained from an iterative decomposition of the network periphery such that each block represents a vertex set of a maximal size sub-graph existing at different levels. The results not only lend support to the previous hierarchical model of the world-system (core, semi-periphery, and periphery) but also find that, depending on particular industry, the number of analytically identifiable blocks could be more than three. We show that 'size effect' is the one that prevails for core block membership at the first hierarchical level, while the GNI per capita is a much poorer proxy for the world-system status. Moreover, the patterns of blocks we label as the second- or third-level 'core' are strongly dependent on distance and geographical proximity. Overall, the various configurations of asymmetrical trade patterns between our blocks and the remarkably stable position of core countries at the top of structure clearly indicate that the rise of global production networks has actually restored a huge and unequal international division of labor splitting the world into 'headquarter' and 'factory' economies.

Project description:In our study, we introduce indicators that quantify the influence of each country in complex trade scenarios involving the exchange of raw materials, intermediate goods, and final products across multiple countries. We systematically employ an agent-based model to simulate the propagation of failures from one node to the entire network. This approach allows for the assessment of the impact of each country and the identification of patterns of interaction in the multi-step trade network. Unlike conventional analyses of trade networks, which depict straightforward single-step import/export transactions, our approach captures the intricate realities of processes like raw material procurement, production, and sales in numerous countries from a macroscopic perspective. The findings of our analysis of trade data spanning from 1990 to 2022 reveal several key insights. Firstly, sensitivity to changes in trade volume leading to global failures within interconnected networks has intensified over time. The potential of failure propagation across countries has increased over time, as has the interconnectedness of countries in the global trade landscape. Secondly, despite the increased sensitivity to changes in global trade volume, many countries have become less vulnerable to the influence of others within their multi-step trade networks. This trend aligns with deglobalization, which is evidenced by events such as Brexit and the surge in protectionist measures; these changes indicate a shift in the balance of influence within global trade networks. Thirdly, the results of our analysis of the relationship between load changes and global failures from a regional perspective reveal an intriguing phenomenon: despite limited direct trade connectivity, the interaction between the Latin American and Sub-Saharan African regions is considerable. This suggests the existence of hidden connections between intermediary countries, such that one region's actions can alter the load sensitivity of another, impacting them in unforeseen ways. Furthermore, intra-regional interactions are diminishing in East Asia, while Europe is experiencing a gradual increase in interactions. These trends reflect evolving regional influence, the dynamics of geographic proximity, and the results of economic integration efforts. Additionally, even though the observed period was not long enough to confirm a long-term trend, the previous trend direction was affirmed to persist despite a temporary decrease in trading and reduced sensitivity due to the COVID-19 pandemic. Our study highlights the complexity of global trade dynamics and the need to consider multi-step trade networks and their potential cascading effects when analyzing trade patterns and vulnerabilities.

Dataset Information

The rise of China in the International Trade Network: a community core detection approach.

Publications

The rise of China in the International Trade Network: a community core detection approach.

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