Global Networks of Trade and Bits

Univ. of Trento Dept. of Economics Discussion Paper No. 8/2011

35 Pages Posted: 14 Oct 2011

See all articles by Alessandro Rossi

Alessandro Rossi

University of Trento

Massimo Riccaboni


Stefano Schiavo

University of Trento - Department of Economics and Management; OFCE

Date Written: October 14, 2011


Considerable efforts have been made in the recent years to produce detailed topologies of the Internet. While Internet topology data have brought to the attention of a wide and somehow diverse audience of scholars they have been so far overlooked by economic analyses. In this paper we suggest that such data could be effectively treated as a proxy to characterize the size of the “digital economy” activities at national country level: we therefore analyze the topological structure of the network of trade in digital services (trade in bits) and compare it with that of the more traditional flow of manufactured goods across countries. To perform a meaningful comparison across networks with different characteristics we define a common null model for the number of connections among each country-pair, based on the hypergeometric distribution. Original data are thus filtered using different thresholds so that we focus our attention on the strongest links only, i.e., on links the represent a significant departure from the stochastic benchmark. We find that trade in bits displays a more sparse and less hierarchical network structure, which is more similar to trade in high-skill manufactured goods than total trade. Last, distance plays a more prominent role in shaping the network of international trade in physical goods than trade in digital services.

Keywords: Internet, hypergeometric, international trade, network analysis, distance

JEL Classification: F14, L86, O33

Suggested Citation

Rossi, Alessandro and Riccaboni, Massimo and Schiavo, Stefano, Global Networks of Trade and Bits (October 14, 2011). Univ. of Trento Dept. of Economics Discussion Paper No. 8/2011, Available at SSRN: or

Alessandro Rossi

University of Trento ( email )

Via Giuseppe Verdi 26
Trento, Trento 38152

Massimo Riccaboni

Independent ( email )

Stefano Schiavo (Contact Author)

University of Trento - Department of Economics and Management ( email )

via Inama, 5
Trento, 38100


Valbonne, 06560

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