Varieties of regional integration, international trade networks and risk

This paper explores the relationship between regional integration models and trade network structures. The paper further investigates the implications of these trade relationship configurations on risk. The exploratory study models the European Union and the Association of Southeast Asian Nations as...

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Bibliographic Details
Published in:World economy 2019-09, Vol.42 (9), p.2790-2815
Main Author: Seno‐Alday, Sandra
Format: Article
Language:English
Subjects:
Economic analysis
Economic models
Integration
International trade
Networks
regional integration
Risk
Risk management
Studies
Trade flows
Trade relations
Vulnerability
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Summary:This paper explores the relationship between regional integration models and trade network structures. The paper further investigates the implications of these trade relationship configurations on risk. The exploratory study models the European Union and the Association of Southeast Asian Nations as networks: countries in each region are nodes connected by lines representing commodity trade flows. The study compares the evolution of the two regional networks over a 25‐year period (1990–2014). The results confirm that different regional integration models lead to differently structured economic relationships. The findings show that loosely coupled networks are vulnerable to the failure of a few connected nodes (concentrated vulnerability), but that tightly coupled regional networks are vulnerable to the failure of any of its nodes (random vulnerability). These unique differences in vulnerability have critical implications for managing economic risk.
ISSN:0378-5920
1467-9701
DOI:10.1111/twec.12831