Export Dendograms provides a visualization of trade clusters in the OECD between 1960 and 2007, using four different export measures. This unique visualization provides rich intuition about prominence and polarity in international export markets.

1. Clusters in
OECD Trade
Since 1960
Ben Mazzotta
Outline
Introduction
Motivation
Clusters in OECD Trade Since 1960
Methods
Analysis
Results
Prominence: Ben Mazzotta
Gross Exports
Polarity: Gross
Exports
Prominence: Fletcher School, Tufts University
Normalized
Exports
Polarity:
Normalized
Exports
November 24, 2009

2. Clusters in
OECD Trade
Since 1960
Ben Mazzotta
1 Introduction
Outline Motivation
Introduction
Motivation
Methods
Methods
Analysis
Analysis
Results
Prominence:
Gross Exports
Polarity: Gross
2 Results
Exports
Prominence: Prominence: Gross Exports
Normalized
Exports
Polarity:
Polarity: Gross Exports
Normalized
Exports Prominence: Normalized Exports
Polarity: Normalized Exports

3. Trade Patterns
Clusters in
OECD Trade
Since 1960
Ben Mazzotta
Outline Aggregate statistics typically ignore relationships between
Introduction
Motivation
specific countries. Dyads are the fundamental unit of
Methods
Analysis
analysis.
Results
Prominence:
Gross Exports
Polarity: Gross
Exports
Prominence:
Normalized
Exports
Polarity:
Normalized
Exports

4. Trade Patterns
Clusters in
OECD Trade
Since 1960
Ben Mazzotta
Outline Aggregate statistics typically ignore relationships between
Introduction
Motivation
specific countries. Dyads are the fundamental unit of
Methods
Analysis
analysis.
Results Good data exist for the last 50 years. I have analyzed
Prominence:
Gross Exports flows reported by OECD; but a larger dataset is available
Polarity: Gross
Exports
Prominence:
from IMF’s Direction of Trade Statistics.
Normalized
Exports
Polarity:
Normalized
Exports

5. Trade Patterns
Clusters in
OECD Trade
Since 1960
Ben Mazzotta
Outline Aggregate statistics typically ignore relationships between
Introduction
Motivation
specific countries. Dyads are the fundamental unit of
Methods
Analysis
analysis.
Results Good data exist for the last 50 years. I have analyzed
Prominence:
Gross Exports flows reported by OECD; but a larger dataset is available
Polarity: Gross
Exports
Prominence:
from IMF’s Direction of Trade Statistics.
Normalized
Exports
Polarity:
Hierarchic clustering is a simple, powerful way to
Normalized
Exports characterize a large number of dyadic relationships.

6. Distance
Clusters in
OECD Trade
Since 1960
Ben Mazzotta
Distance Distance, d, is the reciprocal of a trade flow, T .
Outline
Introduction d = 1/T (1)
Motivation
Methods
Analysis Dyads Partners report imports and exports.
Results
Prominence:
Gross Exports Ti,j = Tj,i (2)
Polarity: Gross
Exports
Prominence:
Normalized
Exports
Logarithms For convenience, I’m going to plot d = log(1/T ).
Polarity:
Normalized
Exports
Clustering Clusters require a single distance measure for
each dyad i,j. Therefore I’m going to distinguish
between two types of distance measures.

7. Distance measures
Clusters in
OECD Trade
Since 1960
Ben Mazzotta
Definition
Outline
Bilateral distance
Introduction
1 1
Motivation
db ≡ max , (3)
Methods
Analysis
Ti,j Tj,i
Results
Prominence:
Gross Exports
Polarity: Gross
Exports Definition
Prominence:
Normalized
Exports Unilateral distance
Polarity:
Normalized
Exports
1 1
du ≡ min , (4)
Ti,j Tj,i

8. Clustering
Clusters in
OECD Trade
Since 1960
Ben Mazzotta
Clustering The algorithm chooses an arbitrarily small
Outline distance such that all countries are isolated, and
Introduction gradually increases the threshold until the
Motivation
Methods distance between countries is smaller than the
Analysis
Results
threshold. When two countries are closer than
Prominence:
Gross Exports
the threshold, they join a cluster.
Polarity: Gross
Exports Hierarchic Once two countries have joined in a cluster, they
Prominence:
Normalized
Exports
must remain joined at all higher thresholds.
Polarity:
Normalized
Exports
Complete clusters The condition for addition to a cluster is
that all pairwise members of the new cluster must
satisfy the distance condition.

9. Prominence
Clusters in
OECD Trade
Since 1960
Ben Mazzotta
Outline
Prominence arises from bilateral clusterings. Groups of
Introduction
Motivation
countries that share a high degree of mutual trade are
Methods
Analysis
prominent in one another’s trade policy. Prominent clusters
Results may be measured either with gross trade flows or normalized
Prominence:
Gross Exports exports. These clusters reflect the largest mutual
Polarity: Gross
Exports
Prominence:
concentrations of trade among groups of countries, suggesting
Normalized
Exports that countries will tend to orchestrate their foreign policy to
Polarity:
Normalized
Exports
mutual benefit.

10. Polarity
Clusters in
OECD Trade
Polarity arises from unilateral clusterings. Polar clusters reflect
Since 1960
groups where all dyads exhibit at least one highly concentrated
Ben Mazzotta
export market, indicating the potential for leader and follower
Outline dynamics among these countries. Polar clusters may be:
Introduction
Motivation
unipolar when one member of the cluster is the principal
Methods
Analysis
export market for all others in the cluster,
Results multipolar or bipartite, when two or more members of the
Prominence:
Gross Exports
Polarity: Gross
cluster constitute a large share of partner country
Exports
Prominence: exports, or
Normalized
Exports
Polarity: transitive where one or more countries exhibit high
Normalized
Exports concentration of exports with different partners
on the supply side and the demand side.
There are no obvious thresholds for defining membership in
these categories. With large cluster size, considerable
hybridization may occur.