Estimating international trade status of countries from global liner shipping networks

Abstract: Maritime shipping is a backbone of international trade and, thus, the world economy. Cargo-loaded vessels travel from one country's port to another via an underlying port-to-port transport network, contributing to international trade values of countries en route. We hypothesize that ports that involve trans-shipment activities serve as a third-party broker to mediate trade between two foreign countries and contribute to the corresponding country's status in international trade. We test this hypothesis using a port-level dataset of global liner shipping services. We propose two indices that quantify the importance of countries in the global liner shipping network and show that they explain a large amount of variation in individual countries' international trade values and related measures. These results support a long-standing view in maritime economics, which has yet to be directly tested, that countries that are strongly integrated into the global maritime transportation network have enhanced access to global markets and trade opportunities.