Analysis of Interregional Trade Network Structure: A Case Study of Indonesia

Abstract

Interregional trade plays an important role in Indonesia ’s economy. The interregional trade network represents the flow of economic resources from one region to other regions. Interregional connectivity in Indonesia is usually measured using sample data that is collected through survey. However, availability and growth of those data representing trade transactions increase due to e-commerce and e-government. These provide an opportunity to the government in analyzing the interregional trade network with population data using Social Network Analysis (SNA), in particular through triad analysis. Triad allows one to evaluate the network structure in a local level. Triad census could be used to explain the overall structure of the network as it gives information about the number of triads occurred categorized into 16 types. This study reveals a common pattern in triad census resulted from the interregional trade network graphs for the year of 2016, 2017, 2018, and 2019. Triad types possessing a high score and is statistically significant are type 300 (balance triad with 3 symmetric links), followed by type 210 (triad with 2 mutual links and 1 single link), and type 120C (triad with 1 mutual link). Hence, this study concludes that the most suitable model to explain the structure of interregional trade network in Indonesia is the hierarchical model. Consequently, while determining the balanced state of the interregional trade network, asymmetric link within a cluster is allowed. The cities could be ranked based on theirs demand level. Trade connectivity between cities with different rank is possible in this model so long as it heads from a lower ranked node toward a higher ranked node.