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Determinants of World Demand for U.S. Corn Seeds: The Role of Trade Costs

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  • Jayasinghe, Sampath
  • Beghin, John C.
  • Moschini, GianCarlo

Abstract

The United States is a large net exporter of corn seeds. Seed trade, including corn, has been expanding but its determinants are not well understood. This paper econometrically investigates the determinants of world demand for U.S. corn seeds with a detailed analysis of trade costs impeding exports flows to various markets. Trade costs include costs associated with distance, tariffs, and sanitary-phytosanitary (SPS) regulations imposed by foreign countries on U.S. corn seed exports. SPS policy information comes from the Excerpt data base of USDA-APHIS. The analysis relies on a gravity-like model based on an explicit specification of derived demand for seed by foreign corn producers. A SPS count variable is incorporated as a shifter in the unit cost of seeds faced by foreign users. We use data from 48 countries and for the years 1989 to 2004. We find that all trade costs matter and have had a negative impact on U.S. corn seed exports. Tariffs matter most; followed by SPS measures and distance. An extensive econometric investigation reveals that qualitative results are robust to specification changes, but that sample selection bias is present in log-linear specifications based on seed export levels and approximating zero trade data with a small positive number.

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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6402.

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Date of creation: 2008
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Handle: RePEc:ags:aaea08:6402

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Keywords: Seeds; corn; SPS; phytosanitary; exports; trade cost; technical barriers; tariffs; TBT.; Crop Production/Industries; International Relations/Trade;

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References

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  1. John C. Beghin & Jean-Christophe Bureau, 2001. "Quantitative Policy Analysis of Sanitary, Phytosanitary and Technical Barriers to Trade," Economie Internationale, CEPII research center, issue 87, pages 107-130.
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Citations

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Cited by:
  1. Tran, Nhuong & Wilson, Norbert L.W. & Hite, Diane, 2012. "Choosing the best model in the presence of zero trade: a fish product analysis," 2012: New Rules of Trade?, December 2012, San Diego, California 142790, International Agricultural Trade Research Consortium.
  2. Xiong, Bo & Beghin, John C., 2010. "Does European Aflatoxin Regulation Hurt Groundnut Exporters from Africa?," Staff General Research Papers 31595, Iowa State University, Department of Economics.
  3. Cairns, Alexander P. & Ker, Alan, 2013. "Unconditional Quantile Estimation: An Application to the Gravity Framework," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150399, Agricultural and Applied Economics Association.
  4. Federica DeMaria & Sophie Drogue, 2013. "EU trade regulation for baby food: protecting health or trade?," Working Papers 192807, Institut National de la Recherche Agronomique, France.
  5. Jasmin Katrin Gröschl, 2013. "Gravity Model Applications and Macroeconomic Perspectives," ifo Beiträge zur Wirtschaftsforschung, Ifo Institute for Economic Research at the University of Munich, number 48, July.
  6. Pramila Crivelli & Jasmin Gröschl, 2012. "The Impact of Sanitary and Phytosanitary Measures on Market Entry and Trade Flows," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 12092, Institut d'Economie et Econométrie, Université de Genève.
  7. Rickard, Bradley J. & Lei, Lei, 2010. "How important are sanitary and phytosanitary barriers in international markets for fresh fruit?," Working Papers 126974, Cornell University, Department of Applied Economics and Management.
  8. Li, Yuan & Beghin, John C., 2012. "A meta-analysis of estimates of the impact of technical barriers to trade," Journal of Policy Modeling, Elsevier, vol. 34(3), pages 497-511.
  9. Xiong, Bo & Beghin, John C., 2010. "Aflatoxin Redux: Does European Aflatoxin Regulation Hurt Groundnut Exporters from Africa?," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61314, Agricultural and Applied Economics Association.
  10. Murat Genç & David Law, 2014. "A Gravity Model of Barriers to Trade in New Zealand," Treasury Working Paper Series 14/05, New Zealand Treasury.
  11. Cairns, Alexander P. & Meilke, Karl D., 2012. "The Next-11 and the BRICs: Are They the Future Markets for Agrifood Trade?," Trade Policy Briefs 145971, Canadian Agricultural Trade Policy Research Network.
  12. Zhou, Minyu & Sheldon, Ian, 2013. "The Role of Intellectual Property Rights in Seed Technology Transfer through Trade – Evidence from U.S. Field Crop Seed Exports," Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152368, International Agricultural Trade Research Consortium.
  13. Karov, Vuko & Roberts, Donna & Grant, Jason H. & Peterson, Everett B., 2009. "A Preliminary Empirical Assessment of the Effect of Phytosanitary Regulations on US Fresh Fruit and Vegetable Imports," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49345, Agricultural and Applied Economics Association.
  14. Haq, Zahoor Ul & Meilke, Karl D. & Cranfield, John A.L., 2011. "The Gravity Model and the Problem of Zero`s in Agrifood Trade," Working Papers 116851, Canadian Agricultural Trade Policy Research Network.

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