2008/10 | LEM Working Paper Series | |
Using a complex weighted-network approach to assess the evolution of international economic integration: The cases of East Asia and Latin America |
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Javier Reyes, Giorgio Fagiolo, Stefano Schiavo |
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Keywords | ||
Networks; World trade web; international trade; weighted network analysis; integration; trade openness; LATAM vs. HPAE countries.
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JEL Classifications | ||
F10, D85
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Abstract | ||
Over the past four decades the High Performing Asian
Economies (HPAE) have followed a development strategy based on the
exposure of their local markets to the presence of foreign
competition and on an outward oriented production. In contrast,
Latin American Economies (LATAM) began taking steps in this
direction only in the late eighties and early nineties, but before
this period these countries were more focused on the implementation
of import substitution policies. These divergent paths have led to
sharply different growth performance in the two regions. Yet,
standard trade openness indicators fall short of portraying the
peculiarity of the Asian experience, and to explain why other
emerging markets with similar characteristics have been less
successful over the last 25 years. We offer an alternative
perspective on the issue by exploiting recently-developed indicators
based on weighted-network analysis. We study the evolution of the
core-periphery structure of the World Trade Network (WTN) and, more
specifically, the evolution of the HPAE and LATAM countries within
this network. Using random-walk betweenness centrality measure, the
paper shows that the HPAE countries are more integrated into the WTN
and many of them, which were in the periphery in the eighties, are
now in the core of the network. In contrast, the LATAM economies, at
best, have maintained their position over the 1980 - 2005 period,
and in some cases have fallen in the ranking of centrality.
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