Recent literature about gravity models points out the importance of institutional frictions in the international market of agricultural products beyond the traditional economics variables as transport costs reducing the mass of trade in bilateral relationships. In particular, previous contributions stress that harmonization of food standards could decrease transaction costs in trading relationships by stimulating international market. In a previous work we hypothesized that the acknowledgment of equivalence in organic standards may represent a reliable signal of affinity in bilateral relationships which may be useful to identify areas in which transaction costs for both conventional and organic standards are lower. This article represents a step forward, since it assumes that the acknowledgment of equivalence in identifying areas with lower transaction costs in trading relationships for the whole produce could be a strong assumption that may be relaxed through the hypothesis that affinity in market exchange could be simply signaled by the presence of organic standards for the involved countries. Therefore, in our analysis we test if countries setting specific rules for organic standards are more âaffineâ in trading relationships because of a low common cultural, law and political distance but also if differences in organic standards themselves can be useful to differentiate the level of affinity among regions. Interesting insights for policy makers about the identification of relevant variables for international business arise from an econometric analysis.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Length: Date of creation: 2008 Date of revision: Handle: RePEc:ags:aaea08:6159
Contact details of provider: Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202 Phone: (414) 918-3190 Fax: (414) 276-3349 Email: Web page: http://www.aaea.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (AgEcon Search).
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)