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Latin American Agri-Food Exports, 1994–2019: A Gravity Model Approach

Author

Listed:
  • María-Isabel Ayuda

    (Department of Economic Analysis, Faculty of Economics and Business Studies, Universidad de Zaragoza, 50005 Zaragoza, Spain
    Institute of Employment, Digital Society and Sustainability (IEDIS), 50005 Zaragoza, Spain)

  • Ignacio Belloc

    (Department of Economic Analysis, Faculty of Economics and Business Studies, Universidad de Zaragoza, 50005 Zaragoza, Spain
    Institute of Employment, Digital Society and Sustainability (IEDIS), 50005 Zaragoza, Spain)

  • Vicente Pinilla

    (Department of Applied Economics, Faculty of Economics and Business Studies, Universidad de Zaragoza, Gran Vía 2-4, 50005 Zaragoza, Spain
    Instituto Agroalimentario de Aragon (IA2), Universidad de Zaragoza-CITA, Gran Vía 2-4, 50005 Zaragoza, Spain)

Abstract

This study analyses the causes of the strong growth in the agri-food exports of Latin America between 1994 and 2019. To do this, a series of gravity models are estimated, using as a dependent variable the agri-food exports of 15 Latin American countries to their 185 principal trading partners. The empirical specification is based on the gravity theory of trade, according to which, trade between two countries is determined by the size of both of their markets and their transport costs. Other variables have also been included, considering the theoretical foundations proposed for the gravity model. We initially used the PPML estimator since it is the method that provides estimates with the best properties. We later compared these results with those obtained through OLS and the Heckman selection model. Our findings show that the growth in agri-food exports is explained by factors of both supply and demand, but that the latter plays a more important role since we have obtained evidence of a reverse home-market effect. Furthermore, we can conclude that the creation of regional trade agreements, such as NAFTA, MERCOSUR, CACM, APEC, and TPP, has significantly favoured agri-food exports in the region.

Suggested Citation

  • María-Isabel Ayuda & Ignacio Belloc & Vicente Pinilla, 2022. "Latin American Agri-Food Exports, 1994–2019: A Gravity Model Approach," Mathematics, MDPI, vol. 10(3), pages 1-22, January.
    • Handle: RePEc:gam:jmathe:v:10:y:2022:i:3:p:333-:d:730720
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    References listed on IDEAS

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    3. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
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