The effect of imports on export development : a network analytical view of international trade in music

Abstract

What are the effects of imports on export development? Would low influence from imports provide more opportunity to local producers to develop radically new products that could later be exported as a uniquely local specialization? Or would a lack of influence from imports only lead to local products being incompatible with foreign tastes or standards, thus hindering export development? I argue that consuming imports has a homogenizing effect on tastes, and domestic music that thrives in such an altered selective environment is more likely to be exportable as well. In a longitudinal network analysis of trade in music recordings, I find that success in developing new export markets was strongly dependent on importing history. The strongest effect from consuming imports for a given country's industry was in the likelihood of exporting to other countries that have experienced the same influences. I find that other industries describe a spectrum in terms of how strongly trade patterns are shaped by common influence effects in a cross-sectional network analysis of trade patterns beyond music. Other industries that were strongly shaped by common influence effects included goods that are largely valued in terms of personal tastes or cultural context. Industries at the opposite end of the spectrum, with very low common influence effects, included goods that are highly uniform or have an essentially objective utilitarian function. A middle group included goods for which personal taste is relevant, but also have widely shared criteria for quality. These findings are novel and important in that they require us to add the demand side, via the history of consumption of imports, to our understanding of global competitiveness in export development. The method of quantitative network analysis allows for a careful analysis of the endogenous dynamics of the global pattern of trade.