Advertisement

Journal of Geographical Systems

, Volume 15, Issue 3, pp 319–367 | Cite as

Social networks and trade of services: modelling interregional flows with spatial and network autocorrelation effects

  • Tamara de la Mata
  • Carlos LlanoEmail author
Original Article

Abstract

Recent literature on border effect has fostered research on informal barriers to trade and the role played by network dependencies. In relation to social networks, it has been shown that intensity of trade in goods is positively correlated with migration flows between pairs of countries/regions. In this article, we investigate whether such a relation also holds for interregional trade of services. We also consider whether interregional trade flows in services linked with tourism exhibit spatial and/or social network dependence. Conventional empirical gravity models assume the magnitude of bilateral flows between regions is independent of flows to/from regions located nearby in space, or flows to/from regions related through social/cultural/ethic network connections. With this aim, we provide estimates from a set of gravity models showing evidence of statistically significant spatial and network (demographic) dependence in the bilateral flows of the trade of services considered. The analysis has been applied to the Spanish intra- and interregional monetary flows of services from the accommodation, restaurants and travel agencies for the period 2000–2009, using alternative datasets for the migration stocks and definitions of network effects.

Keywords

Social networks Gravity models Trade of services Internal tourism Bayesian spatial autoregressive regression model Spatial connectivity of origin–destination flows 

JEL Classification

C21 F12 F14 L83 R22 

Notes

Acknowledgments

The authors want to express their gratitude to James LeSage for his help on improving previous versions of this paper. We also want to thank the helpful comments received from Giovanni Peri, Vicente Blanes and the other participants in the INTECO meeting in 2010. This paper has been developed in the context of different research projects: TransporTrade S2007/HUM/497, (www.uam.es/transportrade), funded by the Education Department of the Madrid Regional Government; the Project (ECO2010-21643/ECON) by the Spanish Ministry of Science and Innovation, as well as the DESTINO Project (Ministerio de Fomento). T. de la Mata also acknowledges the fund received from the Universidad Autónoma de Madrid (Programa FPI UAM). Carlos Llano also thanks the support received by the New York University Economics Department, where part of this work was also accomplished during an academic stay in the Fall semester 2012.

References

  1. Angulo AM, Mtimet N, Dhehibi B, Atwi M, Ben Youssef O, Gil JM, Sai MB (2011) A revisited gravity equation in trade flow analysis: an application to the case of Tunisian olive oil exports. Investig Reg (21):225–239Google Scholar
  2. Anselin L (1988) Spatial econometrics: methods and models. Kluwer, BerlinCrossRefGoogle Scholar
  3. Athanasopoulos G, Hyndman RJ (2008) Modelling and forecasting Australian domestic tourism. Tour Manag 29(1):19–31CrossRefGoogle Scholar
  4. Autant-Bernard C, LeSage J (2011) Quantifying knowledge spillovers using spatial econometric Models. J Reg Sci 51(3):471–496CrossRefGoogle Scholar
  5. Behrens K, Ertur C, Koch W (2010) ‘Dual’ gravity: using spatial econometrics to control for multilateral resistance. J Appl Economet. first published online: 12 Dec 2010Google Scholar
  6. Belderbos R, Sleuwaegen L (1998) Tariff jumping FDI and export substitution: Japanese electronics firms in Europe. Int J Ind Organ 16(5):601–638CrossRefGoogle Scholar
  7. Berglund S (2001) Gis in transport modelling. Royal Institute of Technology, Department of Infrastructure. Report. Google Scholar
  8. Berglund S, Karström A (1999a) Identifying local spatial association in flow data. J Geogr Syst 1(3):219–236CrossRefGoogle Scholar
  9. Berglund S, Karström A (1999b) TECHNICAL REPORT: computing Gi and Gij. Program Documentation. MimeoGoogle Scholar
  10. Black WR (1992) Network autocorrelation in transport network and flow systems. Geograph Anal 24(3):207–222CrossRefGoogle Scholar
  11. Bolduc D, Laferriere R, Santarossa G (1992) Spatial autoregressive error-components in travel flow models. Reg Sci Urban Econ 22(3):371–385CrossRefGoogle Scholar
  12. Chen N (2004) Intra-national versus international trade in the European Union: why do national borders matter? J Int Econ 63(1):93–118CrossRefGoogle Scholar
  13. Chun Y (2008) Modeling network autocorrelation within migration flows by eigenvector spatial filtering. J Geogr Syst 10(4):317–344CrossRefGoogle Scholar
  14. Chun Y, Griffith DA (2011) Modeling network autocorrelation in space–time migration flow data: an eigenvector spatial filtering approach. Ann Assoc Am Geogr 101(3):523–536CrossRefGoogle Scholar
  15. Combes PP, Lafourcade M, Mayer T (2005) The trade-creating effects of business and social networks: evidence from France. J Int Econ 66(1):1–29CrossRefGoogle Scholar
  16. De la Mata T, Llano C (2012) How tradable are non-tradables? Measuring interregional flows of accommodation, restaurants and travel agencies in Spain. MimeoGoogle Scholar
  17. Dunlevy JA, Hutchinson WK (1999) The impact of immigration on American import trade in the late nineteenth and early twentieth centuries. J Econ Hist 59(4):1043–1062CrossRefGoogle Scholar
  18. Dunlevy JA, Hutchinson WK (2001) The pro-trade effect of immigration on American exports during the late nineteenth and early twentieth centuries. IZA Discussion Papers 375, Institute for the Study of Labor (IZA). http://ideas.repec.org/p/iza/izadps/dp375.html
  19. Egger P, Larch M (2008) Interdependent preferential trade agreement memberships: an empirical analysis. J Int Econ 76(2):384–399CrossRefGoogle Scholar
  20. Eriksen L, Ahmt T (1999) Measuring and modelling the regional impact of tourism in Denmark. Int J Tour Res 1(5):313–327CrossRefGoogle Scholar
  21. Evans CL (2006) Border effects and the availability of domestic products abroad. Can J Econ 39(1):211–246CrossRefGoogle Scholar
  22. Fischer MM, Griffith DA (2008) Modeling spatial autocorrelation in spatial Interaction data: an application to patent Citation data in the European Union. J Reg Sci 48(5):969–989CrossRefGoogle Scholar
  23. Garmendia A, Minondo A, Llano C, Requena F (2012) Networks and the disappearance of the intranational home bias. Econ Lett 116(2):178–182Google Scholar
  24. Ghemawat P, Llano C, Requena F (2010) Competitiveness and interregional as well as international trade: the case of Catalonia. Int J Ind Organ 28(4):415–422CrossRefGoogle Scholar
  25. Girma S, Yu ZH (2002) The link between immigration and trade: evidence from the United Kingdom. Weltwirtschaftliches Archiv/World Econ 138(1):115–130CrossRefGoogle Scholar
  26. Gould DM (1994) Immigrant links to the home country—empirical implications for United-States bilateral trade-flows. Rev Econ Stat 76(2):302–316CrossRefGoogle Scholar
  27. Head K, Mayer T (2010) Illusory border effect: distance mismeasurement inflates estimates of home bias in trade, vol. The gravity model in international trade: advances and applications. Cambridge University Press, CambridgeGoogle Scholar
  28. Head K, Ries J (1998) Immigration and trade creation: econometric evidence from Canada. Can J Econ 31(1):47–62CrossRefGoogle Scholar
  29. Helliwell JF (1996) Do national borders matter for Quebec’s trade? Can J Econ 29(3):507–522CrossRefGoogle Scholar
  30. Helliwell JF (1997) National borders, trade and migration. Pac Econ Rev 2(3):165–185CrossRefGoogle Scholar
  31. Ledyaeva S (2009) Spatial econometric analysis of foreign direct investment determinants in Russian regions. World Econ 32(4):643–666CrossRefGoogle Scholar
  32. LeSage JP, Fischer MM (2009) The impact of knowledge capital on regional total factor productivity (April 20, 2009). Available at SSRN: http://ssrn.com/abstract=1088301 or doi: 10.2139/ssrn.1088301
  33. Lesage JP, Fischer MM (2008b) Spatial growth regressions: model specification, estimation and interpretation. Spatial Econ Anal 3(3):275–304CrossRefGoogle Scholar
  34. LeSage JP, Pace RK (2008) Spatial econometric modeling of origin-destination flows. J Reg Sci 48(5):941–967CrossRefGoogle Scholar
  35. LeSage JP, Pace RK (2009) Introduction to Spatial Econometrics. Chapman & Hall/CRC Press, LondonCrossRefGoogle Scholar
  36. Lesage JP, Thomas-Agnan C (2012) Interpreting spatial econometric origin-destination flow models. Working Paper, Mimeo presented in southern regional science association conference hold in Charlotte, March, 2012Google Scholar
  37. Llano C, de la Mata T (2009a) El comercio interregional en España: una estimación de los flujos bilaterales del sector turismo. Revista ICE 848:67–87Google Scholar
  38. Llano C, de la Mata T (2009b) El comercio intra e interregional del sector turismo en España. Documento de Trabajo de FUNCAS 446:1–46Google Scholar
  39. McCallum J (1995) National borders matter: Canada-U.S. regional trade patterns. Am Econ Rev 85(3):615–623Google Scholar
  40. Millimet DL, Osang T (2007) Do state borders matter for U.S. intranational trade? The role of history and internal migration. Can J Econ 40(1):93-126Google Scholar
  41. Okubo T (2004) The border effect in the Japanese market: a gravity model analysis. J Jpn Int Econ 18(1):1–11CrossRefGoogle Scholar
  42. Perry MJ, Schachter J (2003) Migration of natives and the foreign born: 1995 to 2000, Technical report, U.S. Census BureauGoogle Scholar
  43. Podolny JM, Page KL (1998) Network forms of organization. Annu Rev Sociol 24:57–76CrossRefGoogle Scholar
  44. Porojan A (2001) Trade flows and spatial effects: the gravity model revisited. Open Econ Rev 12(3):265–280CrossRefGoogle Scholar
  45. Portes R, Rey H (2005) The determinants of cross-border equity flows. J Int Econ 65(2):269–296CrossRefGoogle Scholar
  46. Rauch JE (2001) Business and social networks in international trade. J Econ Lit 39(4):1177–1203CrossRefGoogle Scholar
  47. Rauch JE, Casella A (2003) Overcoming informational barriers to international resource allocation: prices and ties. Econ J 113(484):21–42CrossRefGoogle Scholar
  48. Rauch JE, Trindade V (2002) Ethnic Chinese networks in international trade. Rev Econ Stat 84(1):116–130CrossRefGoogle Scholar
  49. Requena F, Llano C (2010) The border effects in Spain: an industry-level analysis. Empirica 37(4):455–476CrossRefGoogle Scholar
  50. Wagner D, Head K, Ries J (2002) Immigration and the trade of provinces. Scott J Polit Econ 49(5):507–525CrossRefGoogle Scholar
  51. White R, Tadesse B (2008) Cultural distance and the US immigrant-trade link. World Econ 31(8):1078–1096CrossRefGoogle Scholar
  52. Wolf HC (2000) Intranational home bias in trade. Rev Econ Stat 82(4):555–563CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  1. 1.IESE Business SchoolBarcelonaSpain
  2. 2.Departamento de Análisis Económico: Teoría Económica e Historia Económica and Instituto L.R. KleinUniversidad Autónoma de MadridMadridSpain

Personalised recommendations