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

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Author Info
Jayasinghe, Sampath J.D.Y.
Beghin, John C.
Moschini, GianCarlo

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Abstract

The United States is a large net exporter of corn seeds. Seed trade, including that of 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 export flows to various markets, including costs associated with distance, tariffs, and sanitary and phytosanitary (SPS) regulations. The analysis relies on a gravity-like model based on an explicit specification of derived demand for seed by foreign corn producers, estimated based on data from 48 countries and for the years 1989 to 2004. An SPS count variable is incorporated as a shifter in the unit cost of seeds faced by foreign users. A sample selection framework is used to account for the determination of which trade flows are positive. All trade costs matter and have had a negative impact on U.S. corn seed exports. Tariffs matter most, followed by distance and SPS measures.

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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 13018.

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Date of creation: 13 Jan 2009
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Handle: RePEc:isu:genres:13018

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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Related research
Keywords: corn; distance; phytosanitary; seeds; SPS; tariff; technical barriers; trade cost.;

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  1. Anne-Célia Disdier & Lionel Fontagné & Mondher Mimouni, 2008. "The Impact of Regulations on Agricultural Trade: Evidence from the SPS and TBT Agreements," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 90(2), pages 336-350, 05. [Downloadable!] (restricted)
  2. John C. Beghin & Jean-Christophe Bureau, 2001. "Quantitative Policy Analysis of Sanitary, Phytosanitary and Technical Barriers to Trade," Economie Internationale, CEPII research center, issue 3Q, pages 107-130. [Downloadable!]
    Other versions:
  3. Everett B. Peterson & David Orden, 2008. "Avocado Pests and Avocado Trade," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 90(2), pages 321-335, 05. [Downloadable!] (restricted)
  4. Ghazalian, Pascal & Tamini, Lota & Larue, Bruno & Gervais, Jean-Philippe, 2007. "A Gravity approach to evaluate the significance of trade liberalization in vertically-related goods in the presence of non-tariff barriers," MPRA Paper 2744, University Library of Munich, Germany. [Downloadable!]
  5. Fernandez-Cornejo, Jorge & Caswell, Margriet, 2006. "The First Decade of Genetically Engineered Crops in the USA," Economic Information Bulletin 33897, United States Department of Agriculture, Economic Research Service. [Downloadable!]
  6. Will Martin & Cong S. Pham, 2008. "Estimating the Gravity Model When Zero Trade Flows are Frequent," Economics Series 2008_03, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance. [Downloadable!]
  7. Alan V. Deardorff & Robert M. Stern, 1997. "Measurement of Non-Tariff Barriers," OECD Economics Department Working Papers 179, OECD, Economics Department. [Downloadable!]
  8. John C. Beghin, 2006. "Nontariff Barriers," Center for Agricultural and Rural Development (CARD) Publications 06-wp438, Center for Agricultural and Rural Development (CARD) at Iowa State University. [Downloadable!]
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  9. Anne-Célia Disdier & Keith Head, 2008. "The Puzzling Persistence of the Distance Effect on Bilateral Trade," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 37-48, 09. [Downloadable!] (restricted)
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