International Arms Trade: A Dynamic Separable Network Model With Heterogeneity Components
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We investigate data from the Stockholm International Peace Research Institute (SIPRI) on international trade of major conventional weapons from 1950 to 2016. The general structure of the statistical model is based on the separable temporal exponential random graph model (StERGM), but extends this model in two aspects. In order to provide a more realistic framework for dynamics, we allow for time-varying covariate effects. The considerable actor- and time-based heterogeneity is modelled by incorporating smooth time-varying random effects. In a second step, the time-vaying random effects are subjected to a functional principal component analysis. Our main findings are that arms trading is driven by strong network effects, notably reciprocity and triadic closure, but also by exogenous factors as captured by political and economic characteristics. A careful analysis of the country-specific random effects identifies countries that increased or decreased their relative importance in the arms network during the observation period.
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