Complex network approach to international trade relations: The case of Turkey

Network approach to international trade, in the scope of complexity economics, enables an alternative method in order to make analysis deeply against superficiality of traditional approaches. Many studies have revealed that complex networks are one of the formations of complex systems. In the field of economics, a lot of complex network analysis on financial and trade relations has been done since especially 1990's. In this thesis, on the basis of the hypothesis that international trade network has complex network properties, some tests are done for the international trade network of consumption, intermediate and capital goods which are main sub-sectors of manufacturing industry. First of all, it has been analyzed in terms of fitness to power-law (Pareto) distribution which shows how complex a network is. It has been determined that consumption and capital goods networks fit Pareto distribution and intermediate goods network fits Pareto 2 distribution. Pareto distribution shows that countries form their trade relations in accordance with preferential attachment principle and that there is heterogeneity among countries in terms of trade relations. These networks have also been analyzed in terms of assortativity/disassortativity which is also one of the most important topological properties of complex networks. Disassortativity has been detected for each network. In the scope of disassortativity which is also indicator of core-periphery structure of a network, the core-periphery structure and change of it over time has been analyzed for each network. w-HITS algorithm as a centrality measure has also been applied to the data. In this context, Turkey seems dependent on import of intermediate and capital goods which have higher complexity level. Findings of the study generally verify that international trade network of these sectors has complex network properties. Keywords: Complex Systems, Complexity Economics, Complex Networks,International Trade Networks.