IDEAS home Printed from https://ideas.repec.org/p/pav/demwpp/083.html
   My bibliography  Save this paper

Food competition in world markets: Some evidence from a panel data analysis of top exporting countries

Author

Listed:
  • Donatella Baiardi

    (Department of Economics, Quantitative Methods and Business Strategies, University of Milano-Bicocca)

  • Carluccio Bianchi

    (Department of Economics and Management, University of Pavia)

  • Eleonora Lorenzini

    (Department of Economics and Management, University of Pavia)

Abstract

This paper investigates the relevance of relative prices and world income as determinants of food exports for the top trading countries in the period 1992-2012 using a panel data framework. A distinction between processed and unprocessed goods is drawn and, within this last category, a specific focus on commodities is made. We find that price elasticities generally take lower values for processed goods, and the opposite holds for income elasticities. Processed goods are also characterized by an inverse relationship between price elasticities and average unit values. The overall analysis leads to the conclusion that both emerging and advanced countries should increase their export specialization in processed goods. Furthermore, developed economies could face the fierce competition from emerging countries by enhancing the quality content of their processed goods exports.

Suggested Citation

  • Donatella Baiardi & Carluccio Bianchi & Eleonora Lorenzini, 2014. "Food competition in world markets: Some evidence from a panel data analysis of top exporting countries," DEM Working Papers Series 083, University of Pavia, Department of Economics and Management.
    • Handle: RePEc:pav:demwpp:083
    as

    Download full text from publisher

    File URL: http://dem-web.unipv.it/web/docs/dipeco/quad/ps/RePEc/pav/demwpp/DEMWP0083.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Prema‐Chandra Athukorala & Sisira Jayasuriya, 2003. "Food Safety Issues, Trade and WTO Rules: A Developing Country Perspective," The World Economy, Wiley Blackwell, vol. 26(9), pages 1395-1416, September.
    2. John Y. Campbell & Pierre Perron, 1991. "Pitfalls and Opportunities: What Macroeconomists Should Know about Unit Roots," NBER Chapters, in: NBER Macroeconomics Annual 1991, Volume 6, pages 141-220, National Bureau of Economic Research, Inc.
    3. Fagerberg, Jan, 2000. "Technological progress, structural change and productivity growth: a comparative study," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 393-411, December.
    4. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    5. Pinelopi Koujianou Goldberg & Michael M. Knetter, 1997. "Goods Prices and Exchange Rates: What Have We Learned?," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1243-1272, September.
    6. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    7. Bashiri Behmiri, Niaz & Pires Manso, José R., 2012. "Crude oil conservation policy hypothesis in OECD (organisation for economic cooperation and development) countries: A multivariate panel Granger causality test," Energy, Elsevier, vol. 43(1), pages 253-260.
    8. Jack Strauss & Mark E. Wohar, 2004. "The Linkage between Prices, Wages, and Labor Productivity: A Panel Study of Manufacturing Industries," Southern Economic Journal, John Wiley & Sons, vol. 70(4), pages 920-941, April.
    9. Pedroni, Peter, 2004. "Panel Cointegration: Asymptotic And Finite Sample Properties Of Pooled Time Series Tests With An Application To The Ppp Hypothesis," Econometric Theory, Cambridge University Press, vol. 20(3), pages 597-625, June.
    10. Kaddour Hadri, 2000. "Testing for stationarity in heterogeneous panel data," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 148-161.
    11. Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
    12. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    13. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
    14. Aiginger, Karl, 1997. "The Use of Unit Values to Discriminate between Price and Quality Competition," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 21(5), pages 571-592, September.
    15. Kym Anderson & Anna Strutt, 2014. "Emerging economies, productivity growth and trade with resource-rich economies by 2030," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(4), pages 590-606, October.
    16. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988. "Estimating Vector Autoregressions with Panel Data," Econometrica, Econometric Society, vol. 56(6), pages 1371-1395, November.
    17. Hansen, Bruce E., 1992. "Efficient estimation and testing of cointegrating vectors in the presence of deterministic trends," Journal of Econometrics, Elsevier, vol. 53(1-3), pages 87-121.
    18. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    19. Antoni Estevadeordal & Brian Frantz & Alan M. Taylor, 2003. "The Rise and Fall of World Trade, 1870–1939," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(2), pages 359-407.
    20. Laura Bottazzi & Giovanni Peri, 2007. "The International Dynamics of R&D and Innovation in the Long Run and in The Short Run," Economic Journal, Royal Economic Society, vol. 117(518), pages 486-511, March.
    21. Augustine C. Arize, 2001. "Traditional export demand relation and parameter instability: An empirical investigation," Journal of Economic Studies, Emerald Group Publishing, vol. 28(6), pages 378-396, October.
    22. Bottasso, Anna & Castagnetti, Carolina & Conti, Maurizio, 2013. "And yet they Co-move! Public capital and productivity in OECD," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 713-729.
    23. Lee, Chien-Chiang & Chang, Chun-Ping, 2008. "Energy consumption and economic growth in Asian economies: A more comprehensive analysis using panel data," Resource and Energy Economics, Elsevier, vol. 30(1), pages 50-65, January.
    24. Markus Eberhardt, 2012. "Estimating panel time-series models with heterogeneous slopes," Stata Journal, StataCorp LP, vol. 12(1), pages 61-71, March.
    25. Hallak, Juan Carlos, 2006. "Product quality and the direction of trade," Journal of International Economics, Elsevier, vol. 68(1), pages 238-265, January.
    26. Du, Xiaodong & Yu, Cindy L. & Hayes, Dermot J., 2011. "Speculation and volatility spillover in the crude oil and agricultural commodity markets: A Bayesian analysis," Energy Economics, Elsevier, vol. 33(3), pages 497-503, May.
    27. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
    28. Matthieu Crozet & Hélène Erkel‐Rousse, 2004. "Trade Performances, Product Quality Perceptions, and the Estimation of Trade Price Elasticities," Review of International Economics, Wiley Blackwell, vol. 12(1), pages 108-129, February.
    29. Peter Pedroni, 2000. "Fully Modified OLS for Heterogeneous Cointegrated Panels," Department of Economics Working Papers 2000-03, Department of Economics, Williams College.
    30. Sven W. Arndt & J. David Richardson, 1987. "Real-Financial Linkages Among Open Economies," NBER Working Papers 2230, National Bureau of Economic Research, Inc.
    31. Irwin, Douglas A., 2002. "Long-run trends in world trade and income," World Trade Review, Cambridge University Press, vol. 1(1), pages 89-100, March.
    32. Essaji, Azim & Fujiwara, Kinya, 2012. "Contracting institutions and product quality," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 269-278.
    33. Peter Pedroni, 1999. "Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 653-670, November.
    34. Costantini, Valeria & Martini, Chiara, 2010. "The causality between energy consumption and economic growth: A multi-sectoral analysis using non-stationary cointegrated panel data," Energy Economics, Elsevier, vol. 32(3), pages 591-603, May.
    35. Raul Serrano & Vicente Pinilla, 2010. "Causes of world trade growth in agricultural and food products, 1951-2000: a demand function approach," Applied Economics, Taylor & Francis Journals, vol. 42(27), pages 3503-3518.
    36. Krugman, Paul, 1989. "Differences in income elasticities and trends in real exchange rates," European Economic Review, Elsevier, vol. 33(5), pages 1031-1046, May.
    37. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    38. Thomas W. Hertel & Zhi Wang & Wusheng Yu, 1998. "Understanding the Determinants of Structural Change in World Food Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1051-1061.
    39. Zahoor Haq & Karl Meilke, 2009. "The Role of Income in Trading‐Differentiated Agri‐Food Products: The Case of Canada, the United States, and Selected EU Countries," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(3), pages 343-363, September.
    40. Giovanni Peri & Laura Bottaz, 2005. "The International Dynamics of R&D and Innovationin the Short Run and in the Long Run," Working Papers 59, University of California, Davis, Department of Economics.
    41. Thomas W. Hertel & Zhi Wang & Wusheng Yu, 1998. "Understanding the Determinants of Structural Change in World Food Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1051-1061.
    42. Matteo Manera, Marcella Nicolini, and Ilaria Vignati, 2013. "Financial Speculation in Energy and Agriculture Futures Markets: A Multivariate GARCH Approach," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    43. Jongwanich, Juthathip, 2009. "The impact of food safety standards on processed food exports from developing countries," Food Policy, Elsevier, vol. 34(5), pages 447-457, October.
    44. Caporale, Guglielmo Maria & Chui, Michael K F, 1999. "Estimating Income and Price Elasticities of Trade in a Cointegration Framework," Review of International Economics, Wiley Blackwell, vol. 7(2), pages 254-264, May.
    45. Bronzini, Raffaello & Piselli, Paolo, 2009. "Determinants of long-run regional productivity with geographical spillovers: The role of R&D, human capital and public infrastructure," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 187-199, March.
    46. Laura Bottazzi & Giovanni Peri, 2005. "The International Dynamics of R&D and Innovation in the Short and in the Long Run," NBER Working Papers 11524, National Bureau of Economic Research, Inc.
    47. Oh, Wankeun & Lee, Kihoon, 2004. "Energy consumption and economic growth in Korea: testing the causality relation," Journal of Policy Modeling, Elsevier, vol. 26(8-9), pages 973-981, December.
    48. Narayan, Paresh Kumar & Smyth, Russell & Prasad, Arti, 2007. "Electricity consumption in G7 countries: A panel cointegration analysis of residential demand elasticities," Energy Policy, Elsevier, vol. 35(9), pages 4485-4494, September.
    49. Saikkonen, Pentti, 1991. "Asymptotically Efficient Estimation of Cointegration Regressions," Econometric Theory, Cambridge University Press, vol. 7(1), pages 1-21, March.
    50. Athukorala, Prema-chandra & Sen, Kunal, 1998. "Processed food exports from developing countries: patterns and determinants," Food Policy, Elsevier, vol. 23(1), pages 41-54, February.
    51. Colin A. Carter & Scott Rozelle, 2001. "Will China become a Major Force in World Food Markets?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 23(2), pages 319-331.
    52. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    53. Pedroni, Peter, 1999. "Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 653-670, Special I.
    54. John Wilkinson, 2004. "The Food Processing Industry, Globalization and Developing Countries," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 1(2), pages 184-201.
    55. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ignacio Cazcarro & Rosa Duarte & Miguel Martín-Retortillo & Vicente Pinilla & Ana Serrano, 2015. "How Sustainable is the Increase in the Water Footprint of the Spanish Agricultural Sector? A Provincial Analysis between 1955 and 2005–2010," Sustainability, MDPI, vol. 7(5), pages 1-26, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Donatella Baiardi & Carluccio Bianchi & Eleonora Lorenzini, 2013. "Food Competition in World Markets: Some Evidence from a Panel Data Analysis of Top Exporting Countries," Working Papers 262, University of Milano-Bicocca, Department of Economics, revised Dec 2013.
    2. Baiardi, Donatella & Bianchi, Carluccio & Lorenzini, Eleonora, 2015. "The price and income elasticities of the top clothing exporters: Evidence from a panel data analysis," Journal of Asian Economics, Elsevier, vol. 38(C), pages 14-30.
    3. Donatella Baiardi & Carluccio Bianchi & Eleonora Lorenzini, 2014. "The price and income elasticities of the top clothing exporters: Evidence from a panel data analysis," DEM Working Papers Series 074, University of Pavia, Department of Economics and Management.
    4. Donatella Baiardi & Carluccio Bianchi & Eleonora Lorenzini, 2013. "The Clothing Export Performance and Prospects for Advanced and Emerging Economies: Evidence from a Panel Data Analysis (new version)," DEM Working Papers Series 040, University of Pavia, Department of Economics and Management.
    5. Donatella Baiardi & Carluccio Bianchi & Eleonora Lorenzini, 2013. "The Clothing Export Performance and Prospects for Advanced and Emerging Economies: Evidence from a Panel Data Analysis," DEM Working Papers Series 038, University of Pavia, Department of Economics and Management.
    6. D. Baiardi & C. Bianchi, 2018. "At the roots of China's striking performance in textile exports: a comparison with its main Asian competitors," Economics Department Working Papers 2018-EP03, Department of Economics, Parma University (Italy).
    7. Baiardi, Donatella & Bianchi, Carluccio, 2019. "At the roots of China's striking performance in textile exports: A comparison with its main Asian competitors," China Economic Review, Elsevier, vol. 54(C), pages 367-389.
    8. P K MISHRA & Manmohan MALL & B B PRADHAN, 2017. "Economic Growth, Structural Change And Intersectoral Linkages In Saarc Economies," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 17(2), pages 75-88.
    9. Costantini, Valeria & Martini, Chiara, 2010. "The causality between energy consumption and economic growth: A multi-sectoral analysis using non-stationary cointegrated panel data," Energy Economics, Elsevier, vol. 32(3), pages 591-603, May.
    10. Swamy, Vighneswara & Dharani, Munusamy, 2019. "The dynamics of finance-growth nexus in advanced economies," International Review of Economics & Finance, Elsevier, vol. 64(C), pages 122-146.
    11. Ciarreta, A. & Zarraga, A., 2010. "Economic growth-electricity consumption causality in 12 European countries: A dynamic panel data approach," Energy Policy, Elsevier, vol. 38(7), pages 3790-3796, July.
    12. In Choi, 2013. "Panel Cointegration," Working Papers 1208, Nam Duck-Woo Economic Research Institute, Sogang University (Former Research Institute for Market Economy).
    13. Hasanov, Fakhri & Bulut, Cihan & Suleymanov, Elchin, 2017. "Review of energy-growth nexus: A panel analysis for ten Eurasian oil exporting countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 369-386.
    14. Sung, Bongsuk & Song, Woo-Yong, 2014. "How government policies affect the export dynamics of renewable energy technologies: A subsectoral analysis," Energy, Elsevier, vol. 69(C), pages 843-859.
    15. Vishal Jaunky, 2013. "Democracy and economic growth in Sub-Saharan Africa: a panel data approach," Empirical Economics, Springer, vol. 45(2), pages 987-1008, October.
    16. Jaunky, Vishal Chandr, 2011. "The CO2 emissions-income nexus: Evidence from rich countries," Energy Policy, Elsevier, vol. 39(3), pages 1228-1240, March.
    17. Hamit-Haggar, Mahamat, 2012. "Greenhouse gas emissions, energy consumption and economic growth: A panel cointegration analysis from Canadian industrial sector perspective," Energy Economics, Elsevier, vol. 34(1), pages 358-364.
    18. Ferreira, Cândida, 2020. "Globalisation and Economic Growth: A Panel Data Approach," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 73(2), pages 187-236.
    19. Alessio Ciarlone, 2019. "The relationship between financial development and growth: the case of emerging Europe," Questioni di Economia e Finanza (Occasional Papers) 521, Bank of Italy, Economic Research and International Relations Area.
    20. Ciarreta Antuñano, Aitor & Zárraga Alonso, Ainhoa, 2008. "Economic Growth and Electricity Consumption in 12 European Countries: A Causality Analysis Using Panel Data," BILTOKI 1134-8984, Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística).

    More about this item

    Keywords

    Food Exports; Price and Income elasticities; Cross-country comparisons; Panel data analysis; Panel Granger causality;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pav:demwpp:083. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alice Albonico (email available below). General contact details of provider: https://edirc.repec.org/data/dppavit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.