export linkages to GVCs—particularly to the intermediate regions of such chains—tend to display stronger growth performance.

As a final approximation to the nature and quality of LAC’s evolving pattern of international trade integration we present novel results from an ongoing research program at the Chief Economist Office of Latin America and the Caribbean at the World Bank which uses network approach.<sup>32</sup> Figure 17 shows the density map in the trade networks of East Asia Pacific (EAP) and LAC. The density of a node in this map depends positively on the number of neighboring countries and the economic distance between countries. The node density is translated into colors using a red-green-blue scheme (from the highest to the lowest density). It is worth pointing out that the sample countries included in the density map affects the density of maps themselves, making it harder to directly compare node density across different graphs.<sup>33</sup> Still, some features are still comparable across maps as highlighted below.

For starters, the differences between the two regions are remarkable. The trade network of East Asia is much denser than that of LAC. While all countries are fully connected with all other countries within the East Asian cluster (as indicated by a network density measure of 1.0 for this cluster), countries in the LAC cluster are not as fully integrated with each other (the network density measure for this cluster is 0.87). The graphs also suggest that whereas trade connections within the East Asia Pacific are multidirectional and intense in every direction, those within the LAC network tend to be mainly bi-directional, especially with the US. In other words, triads of trade connections are typically observed at higher frequency in the East Asian than in the LAC network. These type of connectivity observed in the East Asian network suggests strong feedback effects, whereby the strong trade within the East Asian region boosts the strength of trading with the global trade centers and vice versa. LAC countries, by contrast, do not seem significantly to leverage intra-regional trade to boost their connections to the global trade network or vice versa. The proximity of the nodes—a proxy of the extent of clustering effects in the networks—indicate that trade interconnectivity and neighborhood-type effects in the EAP network involves most countries within the region (a visual depiction of the so-called “Asia Factory”) _and_ other central players (China, Japan and the US). In the case of LAC, clustering effects are weaker. The only clear clustering is around the US and, to a lesser extent, around the South Cone, with China appearing in this neighborhood.

Another interesting contrast in these two networks is the relative importance of different countries. In the EAP network, not only are all countries connected among themselves but virtually all the countries (and not just the US, Japan, and China) in the network appear as equally central players (as dense nodes where density rises as the color goes from green to yellow to orange and to red). In contrast, aside from the US, there are no other dense nodes in the LAC network, with the modest exception of Brazil. China appears as part of the LAC network in 2011 with a relatively weak density, comparable to that of Japan. Interestingly, European

> 32 This research will be featured in the 2015 World Bank LCR Regional Flagship Report. More details available at www.worldbank.org/laceconomist.

> 33 The countries in each of the two trade networks (LAC and EAP) in Figure 17 include all countries of each region as well as such central players in the global trade network—USA, China, Japan—and in the case of Latin America, some Western European countries (proxied by Germany, UK, and France) that are also important players in these regional trade networks.

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