In this paper, we propose a new approach to represent a country's outward orientation.
Prior work mostly uses indicators of aggregate trade intensity, trade policy
or trade restrictiveness. Our approach offers a broader perspective as it measures
a country's level of integration not only by its set of direct trade connections with
the rest of the world but also through the full architecture of its second, third, and
all other higher-order connections. We apply our methodology to a sample of 167
countries spanning the period from 1962 to 2009 and perform a Bayesian modelaveraging
analysis on the determinants of growth. We find a prominent positive effect of integration on a country's level of per capita income, while the aforementioned
traditional measures of outward orientation display only a secondary, largely
insignificant, weight. This, we argue, highlights the network basis of economic growth
and adds a novel perspective to the notion of economic openness. We also perform
several sensitivity checks and conclude that our baseline findings are extremely robust
to different data input and alternative assumptions about the computation of
country integration