How does the behaviour of the core differ from the periphery? – An international trade network analysis

Abstract

World systems theory proposes that global trade is stratified into hierarchical groups, a tightly connected core, and a weakly connected periphery. The theory suggests that this hierarchical structure contributes to power imbalances in the global economy and the organisation of the international division of labour. This paper employs a complex network model, an Exponential Random Graph Model (ERGM), to a set of international trade networks to examine how the export patterns of the core differ from the periphery. The analysis highlights that many of the processes underpinning the formation of trade ties are consistent across product groups. The key differences between the high- and low-tech groups are import patterns. The difference between export activity of the core and periphery is also more pronounced for low-tech compared to high-tech. The differences between the export activity of the core and periphery are, that in the low-tech case, larger nations in the periphery are more likely to export, whilst in the core it is smaller nations (up to a point) that are likely to export these low-tech goods. In both the case of the high-tech and low-tech, less affluent nations in the core are more likely to export.