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The Network Structure of International Trade

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  • Thomas Chaney
Abstract
I build a simple dynamic model of the formation of an international social network of importers and exporters. Firms can only export into markets in which they have a contact. They acquire new contacts both at random, and via their network of existing contacts. This model explains (i) the cross-sectional distribution of the number of foreign markets accessed by individual exporters, (ii) the cross-sectional geographic distribution of foreign contacts, and (iii) the dynamics of firm level exports. I show that the firm level dynamics of trade can explain the observed cross section of firm level exports. All theoretical predictions are supported by the data.

Suggested Citation

  • Thomas Chaney, 2011. "The Network Structure of International Trade," NBER Working Papers 16753, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:16753
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    More about this item

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • F1 - International Economics - - Trade

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