Structural Characteristics and Evolutionary Drivers of Global Virtual Water Trade Networks: A Stochastic Actor-Oriented Model for 2000-2015.

Abstract

The globalization of trade has caused tremendous pressure on water resources globally, and a virtual water trade provides a new perspective on global freshwater sharing and water sustainability. No study has yet explored the structural characteristics and drivers of the evolution of global virtual water trade networks from a network structure evolution perspective. This paper aims to fill this critical gap by developing a research framework to explore how endogenous network structures and external factors have influenced the evolution of virtual water trade networks. We constructed virtual water trade networks for 62 countries worldwide from 2000 to 2015 and used an innovative combination of multi-regional input-output data and stochastic actor-oriented models for analytical purposes. Our results support the theoretical hypothesis of ecologically unequal exchange and trade drivers, arguing that virtual water flows from less developed countries to developed countries under global free trade and that unequal trade patterns lead to excessive consumption of virtual water in less developed countries. The results partially support the theoretical content of water endowment and traditional gravity models, finding that trade networks are expanding to farther and larger markets, confirming that national water scarcity levels do not impact the evolution of virtual water trade networks. Finally, we point out that meritocratic links, path dependence, reciprocity, and transmissive links have extreme explanatory power for the evolutionary development of virtual water networks.