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A microscopic study of the fitness-dependent topology of the world trade network

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  • Hoppe, K.
  • Rodgers, G.J.

Abstract

Previous studies have suggested that the world-trade network belongs to the class of static hidden variable models. In this article we investigate the microscopic structure of the world trade network, that is the hidden variable correlation matrix of the network. The hidden variable is defined as a rank ordering of gross domestic products. This choice significantly reduces the noise in the statistical analysis found in previous studies. The hidden variable correlation matrix, that expresses the probability that a trade relationship between two countries of given fitness exists, suggests an attachment kernel that at least partially favours trading pairs or dissimilar fitness rather than the purely multiplicative one found previously. Additionally, we provide an in-depth look at the data source and reveal that first-order results, such as the degree distribution, exhibit significant qualitative differences depending on the data provider. Furthermore, we shed light on the intertemporal activity of international trade and point out that fluctuations occur mostly between countries with strong dissimilarities of fitness and connectivity.

Suggested Citation

  • Hoppe, K. & Rodgers, G.J., 2015. "A microscopic study of the fitness-dependent topology of the world trade network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 419(C), pages 64-74.
    • Handle: RePEc:eee:phsmap:v:419:y:2015:i:c:p:64-74
    DOI: 10.1016/j.physa.2014.09.036
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    References listed on IDEAS

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    3. Chen, Guang & Kong, Rui & Wang, Yixin, 2020. "Research on the evolution of lithium trade communities based on the complex network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 540(C).

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