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Who buys what, where: Reconstruction of the international trade flows by commodity and industry

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  • Yuichi Ikeda

    (Graduate School of Advanced Integrated Studies in Human Survivability, Kyoto University)

  • Tsutomu Watanabe

    (Graduate School of Economics, The University of Tokyo)

Abstract

We developed a model to reconstruct the international trade network by considering both commodities and industry sectors in order to study the effects of reduced trade costs. First, we estimated trade costs to reproduce WIOD and NBER-UN data. Using these costs, we estimated the trade costs of sector specific trade by types of commodities. We successfully reconstructed sector-specific trade for each types of commodities by maximizing the configuration entropy with the estimated costs. In WIOD, trade is actively conducted between the same industry sectors. On the other hand, in NBER-UN, trade is actively conducted between neighboring countries. This seems like a contradiction. We conducted community analysis for the reconstructed sector-specific trade network by type of commodities. The community analysis showed that products are actively traded among same industry sectors in neighboring countries. Therefore the observed features of the community structure for WIOD and NBER-UN are complementary.

Suggested Citation

  • Yuichi Ikeda & Tsutomu Watanabe, 2016. "Who buys what, where: Reconstruction of the international trade flows by commodity and industry," UTokyo Price Project Working Paper Series 071, University of Tokyo, Graduate School of Economics.
    • Handle: RePEc:upd:utppwp:071
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    References listed on IDEAS

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    1. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
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    Cited by:

    1. Yuichi Ikeda & Hidetoshi Takeda, 2020. "Reconstruction of Interbank Network using Ridge Entropy Maximization Model," Papers 2001.04097, arXiv.org, revised Jul 2021.
    2. Wang, Xingxing & Li, Huajiao & Zhu, Depeng & Zhong, Weiqiong & Xing, Wanli & Wang, Anjian, 2021. "Research on global natural graphite trade risk countermeasures based on the maximum entropy principle," Resources Policy, Elsevier, vol. 74(C).
    3. Yuichi Ikeda & Hiroshi Iyetomi, 2018. "Trade Network Reconstruction and Simulation with Changes in Trade Policy," Papers 1806.00605, arXiv.org.
    4. Yuichi Ikeda & Hiroshi Iyetomi, 2018. "Trade network reconstruction and simulation with changes in trade policy," Evolutionary and Institutional Economics Review, Springer, vol. 15(2), pages 495-513, December.

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