International Economic Integration: Comparing Exports and FDI Networks in the New Millennium

Trade and foreign direct investments (FDI) represent the real and the capital side of international economic\r\nintegration. While Network Analysis (NA) on world trade network (WTN) is wide, few analyses describe world\r\ninvestment networks (WIN), since FDI data suitable for comparison are very scarce and very complex to collect.\r\nIn this paper, we exploit FDI Bilateral Statistics by UNCTAD (2014), to compare WTN and WIN in the first\r\ndecade of the new millennium, before and after 2008 crisis. Results show that all countries are integrated since\r\nthere are few isolated economies, and unique largest components emerge confirming the complexity of global\r\nvalue chain. 2008 economic crisis affected WTN, but not WIN. Geography, rather than economic similarity, is\r\ncrucial in defining trading connections and cohesive subgroups. WIN and WTN links are mutual in all networks,\r\nconfirming that once a link is established, it is easier to maintain all commercial relations. WIN and WTN key\r\nplayers are USA, Germany and China for Exports, while USA and Germany for FDI. There is a positive\r\nassociation between couplets of WTN and WIN links, conjecturing that FDI and Exports networks could be\r\ncomplements, rather than substitute