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The Impact of Exchange Rate Volatility on World Broiler Trade

Author

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  • Christopher G. Davis
  • Andrew Muhammad
  • David Karemera
  • David Harvey

Abstract

ABSTRACT Studies of how exchange rate volatility affects aggregate trade flows implicitly assume a uniform response across individual sectors. This is highly unlikely given that the responsiveness of trade to exchange rate fluctuations could depend on the biological, marketing, and economic factors specific to a commodity. Consequently, we focused solely on broilers for this analysis, which is a leading sector in global meat trade. Using a gravity model, we assessed how two measures of exchange rate volatility (short‐ and long‐run) affect cross‐partner broiler trade. Our results indicated that long‐run exchange rate volatility has a negative and significant effect on broiler trade, albeit small when compared to the effects of population, regionalization, and sharing a common border; the short‐run effect of exchange rate volatility was insignificant. Overall, results suggest that exchange rate volatility has little or no effect on bilateral broiler trade. [EconLit citations: C32, F14, Q17].

Suggested Citation

  • Christopher G. Davis & Andrew Muhammad & David Karemera & David Harvey, 2014. "The Impact of Exchange Rate Volatility on World Broiler Trade," Agribusiness, John Wiley & Sons, Ltd., vol. 30(1), pages 46-55, January.
  • Handle: RePEc:wly:agribz:v:30:y:2014:i:1:p:46-55
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    File URL: http://hdl.handle.net/10.1002/agr.21366
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    Cited by:

    1. Nehring, Richard & Gillespie, Jeffrey & Katchova, Ani L. & Hallahan, Charlie & Harris, J. Michael & Erickson, Ken, 2015. "What’s Driving U.S. Broiler Farm Profitability?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(A), pages 1-20, July.

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