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SOE: Fachverband Physik sozio-ökonomischer Systeme
SOE 3: Economic Models I
SOE 3.1: Talk
Monday, March 12, 2018, 10:30–10:45, MA 001
Bilateral trade agreements and the interconnectedness of global trade — Jullian Maluck1,2, Nicole Glanemann1,3, and •Reik V. Donner1 — 1PIK Potsdam, Germany — 2HU Berlin, Germany — 3WHU - Otto Beisheim School of Management, Vallendar, Germany
Over the last decades, bilateral trade agreements (BTAs) have increased considerably in number and economic relevance. Notably, such agreements substantially affect global trade, since the reorganization of flows of goods and services has prominent impacts on the contracting countries' economic sectors, but also on other parties that are (directly or indirectly) engaged in trade with these countries. Here, we empirically study the effect of BTAs on the input-output linkages between the contractual parties' national economic sectors by measuring their Trade Interconnectedness (TI), which describes the relative importance of direct and indirect production linkages between the two countries. By analyzing its time evolution for each pair of trade agreement partners, we demonstrate that while most BTAs are succeeded by an increase in TI between the contractors, there are some notable exceptions. In particular, comparing the trade profiles of China and the United States (US), we find indications that both countries have been pursuing fundamentally different objectives and strategies related to the negotiation of BTAs.