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A First Step to Identifying Underserved Foreign Markets

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  • Cassey, Andrew John
  • Zhao, Xin

Abstract

We describe a first step for identifying foreign markets that may be candidates for export expansion. The method compares export data to the amount of exports predicted by the gravity equation. We estimate four sets of gravity equation coefficients and use both in-sample and outof- sample predictions. To illustrate our method, we use data from Washington agricultural industrial groups. We find many markets, particularly those in Europe, that are currently underserved by Washington agricultural exports, often by large amounts. We also identify overserved markets that can be further studied to provide lessons on what works for increasing exports.

Suggested Citation

  • Cassey, Andrew John & Zhao, Xin, 2017. "A First Step to Identifying Underserved Foreign Markets," Journal of Food Distribution Research, Food Distribution Research Society, vol. 48(2), July.
    • Handle: RePEc:ags:jlofdr:274589
    DOI: 10.22004/ag.econ.274589
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    References listed on IDEAS

    as
    1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    2. Gordon H. Hanson & Chong Xiang, 2004. "The Home-Market Effect and Bilateral Trade Patterns," American Economic Review, American Economic Association, vol. 94(4), pages 1108-1129, September.
    3. Cassey, Andrew, 2006. "State export data: origin of movement vs. origin of production," MPRA Paper 3352, University Library of Munich, Germany.
    4. Jean-François Arvis & Ben Shepherd, 2013. "The Poisson quasi-maximum likelihood estimator: a solution to the ‘adding up’ problem in gravity models," Applied Economics Letters, Taylor & Francis Journals, vol. 20(6), pages 515-519, April.
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    Cited by:

    1. Grossen, Grace E., 2020. "Agricultural trade performance and potential: a retrospective panel data analysis of U.S. exports of corn and soybeans," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304454, Agricultural and Applied Economics Association.

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