The rise and fall of nations: evolving roles in the international trade networks

In this paper, we apply a role classification method to international trade networks derived from the OECD-ICIO dataset. Each node in the network corresponds to a country in the dataset and is associated with a feature vector based on network centrality indicators. After reducing redundant information via principal component analysis, we group countries using fuzzy clustering. This defines distinct roles, to which each country belongs with an appropriate membership level. Our analysis then focuses on how each country’s role in the international production and trade network has evolved between 1995 and 2022 and the related economic implications. The results show that, while many countries (such as the USA and Germany) have essentially maintained their position over time, many others have changed dramatically. For instance, although at different levels, China and Vietnam have transitioned to higher-level roles, whereas the United Kingdom, Japan and Italy, among others, have deteriorated from leader to second-tier country status. Interestingly, a sharp downgrading of role can occur even when economic and network indicators undergo only modest changes, if competing countries increase their performance disproportionately. The work concludes with a separate analysis of some of the most important goods and services sectors. Overall, the results reveal growing polarization, with a small number of leading countries progressively moving away from the rest of the world in terms of economic dominance.