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Global networks of trade and bits

Riccaboni, Massimo and Rossi, Alessandro and Schiavo, Stefano Global networks of trade and bits. Journal of Economic Interaction and Coordination. pp. 33-56. ISSN 1860-711X (2013)

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Considerable efforts have been made in recent years to produce detailed topologies of the Internet, but so far these data have been overlooked by economists. In this paper, we suggest that such information could be used to characterize both the size of the digital economy and outsourcing at country level. We analyse the topological structure of the network of trade in digital services (trade in bits) and compare it with the more traditional flow of manufactured goods across countries. To perform meaningful comparisons across networks with different characteristics, we define a stochastic benchmark for the number of connections among each country-pair, based on hypergeometric distribution. Original data are filtered so that we only focus on the strongest, i.e. statistically significant, links. We find that trade in bits displays a sparser and less hierarchical network structure, which is more similar to trade in high-skill manufactured goods than total trade. Moreover, distance plays a more prominent role in shaping the network of international trade in physical goods than trade in digital services.

Item Type: Article
Identification Number: 10.1007/s11403-012-0101-x
Additional Information: Published online: 25 August 2012
Uncontrolled Keywords: JEL Classification: F14; L86; O33 - Keywords: Internet; International trade; Network analysis; Distance; Outsourcing; Hypergeometric
Subjects: H Social Sciences > HB Economic Theory
Q Science > QA Mathematics > QA75 Electronic computers. Computer science
Research Area: Economics and Institutional Change
Depositing User: Ms T. Iannizzi
Date Deposited: 11 Sep 2012 08:24
Last Modified: 13 Jan 2014 10:32
URI: http://eprints.imtlucca.it/id/eprint/1342

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