Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v20y2011i2p135-145.html
   My bibliography  Save this article

The Heckscher-Ohlin model and the network structure of international trade

Author

Listed:
  • Baskaran, Thushyanthan
  • Blöchl, Florian
  • Brück, Tilman
  • Theis, Fabian J.
Abstract
This paper estimates for 28 product groups a characteristic parameter that reflects the topological structure of its trading network. Using these estimates, it describes how the structure of international trade has evolved during the 1980-2000 period. Thereafter, it demonstrates the importance of networks in international trade by explicitly accounting for their scaling properties when testing the prediction of the "Heckscher-Ohlin" model that factor endowment differentials determine bilateral trade flows. The results suggest that factor endowment differentials increase bilateral trade in goods that are traded in "dispersed" networks. For goods traded in "concentrated" networks, factor endowment differentials are less important.

Suggested Citation

  • Baskaran, Thushyanthan & Blöchl, Florian & Brück, Tilman & Theis, Fabian J., 2011. "The Heckscher-Ohlin model and the network structure of international trade," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 135-145, April.
    • Handle: RePEc:eee:reveco:v:20:y:2011:i:2:p:135-145
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059-0560(10)00112-7
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Giorgio Fagiolo & Javier Reyes & Stefano Schiavo, 2010. "The evolution of the world trade web: a weighted-network analysis," Journal of Evolutionary Economics, Springer, vol. 20(4), pages 479-514, August.
    2. Wilhite, Allen, 2001. "Bilateral Trade and 'Small-World' Networks," Computational Economics, Springer;Society for Computational Economics, vol. 18(1), pages 49-64, August.
    3. Davis, Donald R. & David E. Weinstein & Scott C. Bradford & Kazushige Shimpo, 1997. "Using International and Japanese Regional Data to Determine When the Factor Abundance Theory of Trade Works," American Economic Review, American Economic Association, vol. 87(3), pages 421-446, June.
    4. Réka Albert & Hawoong Jeong & Albert-László Barabási, 1999. "Diameter of the World-Wide Web," Nature, Nature, vol. 401(6749), pages 130-131, September.
    5. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    6. Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521674096, October.
    7. Simon J. Evenett & Wolfgang Keller, 2002. "On Theories Explaining the Success of the Gravity Equation," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 281-316, April.
    8. Bowen, Harry P & Leamer, Edward E & Sveikauskas, Leo, 1987. "Multicountry, Multifactor Tests of the Factor Abundance Theory," American Economic Review, American Economic Association, vol. 77(5), pages 791-809, December.
    9. Thushyanthan Baskaran & Tilman Brück, 2005. "Scale-Free Networks in International Trade," Discussion Papers of DIW Berlin 493, DIW Berlin, German Institute for Economic Research.
    10. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
    11. Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521857406, October.
    12. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    13. M. Goldstein & S. Morris & G. Yen, 2004. "Problems with fitting to the power-law distribution," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 41(2), pages 255-258, September.
    14. Paul Travis Nicholls, 1987. "Estimation of Zipf parameters," Journal of the American Society for Information Science, Association for Information Science & Technology, vol. 38(6), pages 443-445, November.
    15. Giorgio Fagiolo & Javier Reyes & Stefano Schiavo, 2007. "The Evolution of the World Trade Web," LEM Papers Series 2007/17, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    16. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-1046, December.
    17. Hakura, Dalia S., 2001. "Why does HOV fail?: The role of technological differences within the EC," Journal of International Economics, Elsevier, vol. 54(2), pages 361-382, August.
    18. Steven H. Strogatz, 2001. "Exploring complex networks," Nature, Nature, vol. 410(6825), pages 268-276, March.
    19. Florian Blöchl & Fabian J. Theis & Fernando Vega-Redondo & Eric O'N. Fisher, 2010. "Which Sectors of a Modern Economy are most Central?," CESifo Working Paper Series 3175, CESifo.
    20. Raja Kali & Javier Reyes, 2007. "The architecture of globalization: a network approach to international economic integration," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 595-620, July.
    21. Garlaschelli, Diego & Loffredo, Maria I., 2005. "Structure and evolution of the world trade network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 355(1), pages 138-144.
    22. D. Garlaschelli & M. I. Loffredo, 2005. "Structure and Evolution of the World Trade Network," Papers physics/0502066, arXiv.org, revised May 2005.
    23. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ehsan Rasoulinezhad & Gil Seong Kang, 2016. "A Panel Data Analysis of South Korea’s Trade with OPEC Member Countries: The Gravity Model Approach," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 20(2), pages 203-224, Spring.
    2. Yilmazkuday, Hakan, 2015. "Importer-specific elasticities of demand: Evidence from U.S. exports," International Review of Economics & Finance, Elsevier, vol. 35(C), pages 228-234.
    3. Smallbone, David & Saridakis, George & Abubakar, Yazid Abdullahi, 2022. "Internationalisation as a stimulus for SME innovation in developing economies: Comparing SMEs in factor-driven and efficiency-driven economies," Journal of Business Research, Elsevier, vol. 144(C), pages 1305-1319.
    4. Narayan, Seema & Nguyen, Tri Tung, 2016. "Does the trade gravity model depend on trading partners? Some evidence from Vietnam and her 54 trading partners," International Review of Economics & Finance, Elsevier, vol. 41(C), pages 220-237.
    5. Joyez, Charlie, 2017. "On the topological structure of multinationals network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 473(C), pages 578-588.
    6. Gao, Cuixia & Sun, Mei & Shen, Bo, 2015. "Features and evolution of international fossil energy trade relationships: A weighted multilayer network analysis," Applied Energy, Elsevier, vol. 156(C), pages 542-554.
    7. Charlie Joyez, 2017. "Network Structure of French Multinational Firms," Working Papers DT/2017/08, DIAL (Développement, Institutions et Mondialisation).
    8. Xu, Helian & Cheng, Long, 2016. "The QAP weighted network analysis method and its application in international services trade," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 448(C), pages 91-101.
    9. Bhattacharya, Mita & Inekwe, John Nkwoma & Valenzuela, Maria Rebecca, 2020. "Credit risk and financial integration: An application of network analysis," International Review of Financial Analysis, Elsevier, vol. 72(C).
    10. An, Qier & An, Haizhong & Wang, Lang & Gao, Xiangyun & Lv, Na, 2015. "Analysis of embodied exergy flow between Chinese industries based on network theory," Ecological Modelling, Elsevier, vol. 318(C), pages 26-35.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hausmann, Ricardo & Stock, Daniel P. & Yıldırım, Muhammed A., 2022. "Implied comparative advantage," Research Policy, Elsevier, vol. 51(8).
    2. Charlie Joyez, 2019. "Alignment of Multinational Firms along Global Value Chains: A Network-based Perspective," GREDEG Working Papers 2019-05, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    3. Marco Dueñas & Giorgio Fagiolo, 2013. "Modeling the International-Trade Network: a gravity approach," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 8(1), pages 155-178, April.
    4. Florian Blöchl & Fabian J. Theis & Fernando Vega-Redondo & Eric O'N. Fisher, 2010. "Which Sectors of a Modern Economy are most Central?," CESifo Working Paper Series 3175, CESifo.
    5. Giorgio Fagiolo & Tiziano Squartini & Diego Garlaschelli, 2013. "Null models of economic networks: the case of the world trade web," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 8(1), pages 75-107, April.
    6. Luca De Benedictis & Silvia Nenci & Gianluca Santoni & Lucia Tajoli & Claudio Vicarelli, 2014. "Network Analysis of World Trade using the BACI-CEPII Dataset," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 14(03n04), pages 287-343, October.
    7. Javier Reyes & Stefano Schiavo & Giorgio Fagiolo, 2010. "Using complex networks analysis to assess the evolution of international economic integration: The cases of East Asia and Latin America," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 19(2), pages 215-239.
    8. Arribas, Iván & Pérez, Francisco & Tortosa-Ausina, Emili, 2009. "Measuring Globalization of International Trade: Theory and Evidence," World Development, Elsevier, vol. 37(1), pages 127-145, January.
    9. Qing Guan & Haizhong An & Xiaoqing Hao & Xiaoliang Jia, 2016. "The Impact of Countries’ Roles on the International Photovoltaic Trade Pattern: The Complex Networks Analysis," Sustainability, MDPI, vol. 8(4), pages 1-16, March.
    10. Julian Maluck & Reik V Donner, 2015. "A Network of Networks Perspective on Global Trade," PLOS ONE, Public Library of Science, vol. 10(7), pages 1-24, July.
    11. Felipe Chávez-Bustamante & Elliott Mardones-Arias & Julio Rojas-Mora & Jaime Tijmes-Ihl, 2023. "A Forgotten Effects Approach to the Analysis of Complex Economic Systems: Identifying Indirect Effects on Trade Networks," Mathematics, MDPI, vol. 11(3), pages 1-20, January.
    12. Luca Salvatici & Silvia Nenci, 2017. "New features, forgotten costs and counterfactual gains of the international trading system," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(4), pages 592-633.
    13. Dieter Schumacher, 2001. "Market Size and Factor Endowment: Explaining Comparative Advantage in Bilateral Trade by Differences in Income and Per Capita Income," Discussion Papers of DIW Berlin 259, DIW Berlin, German Institute for Economic Research.
    14. Nobi, Ashadun & Lee, Tae Ho & Lee, Jae Woo, 2020. "Structure of trade flow networks for world commodities," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 556(C).
    15. Giorgio Fagiolo, 2010. "The international-trade network: gravity equations and topological properties," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 5(1), pages 1-25, June.
    16. Javier Reyes & Giorgio Fagiolo & Stefano Schiavo, 2008. "Using a complex weighted-network approach to assess the evolution of international economic integration: The cases of East Asia and Latin America," LEM Papers Series 2008/10, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    17. Fan, Ying & Ren, Suting & Cai, Hongbo & Cui, Xuefeng, 2014. "The state's role and position in international trade: A complex network perspective," Economic Modelling, Elsevier, vol. 39(C), pages 71-81.
    18. James Harrigan, 2001. "Specialization and the Volume of Trade: Do the Data Obey the Laws?," NBER Working Papers 8675, National Bureau of Economic Research, Inc.
    19. James E. Anderson & Douglas Marcouiller, 2002. "Insecurity And The Pattern Of Trade: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 342-352, May.
    20. Arribas Ivan & Perez Francisco & Tortosa-Ausina Emili, 2010. "The Determinants of International Financial Integration Revisited: The Role of Networks and Geographic Neutrality," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 15(1), pages 1-55, December.

    More about this item

    Keywords

    Networks International trade Gravity model;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • F10 - International Economics - - Trade - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:20:y:2011:i:2:p:135-145. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.