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Short- and long-term impact of remarkable economic events on the growth causes of China–Germany trade in agri-food products

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  • Guo, Zhichao
  • Feng, Yuanhua
  • Tan, Xiangyong

Abstract

This paper focuses on a systematic quantitative discussion of the short- and long-term impact of remarkable economic events on international trade in a two-stage framework. Firstly, procedures based on dummy variables are proposed to detect structural breaks, types and sizes of jumps caused by such events. Then we propose to apply a hierarchical CMS (Constant Market Share) model to all sub-periods determined by the detected change points to study the short- and long-term impact of those events on growth causes. Application to China–Germany trade in agri-food products shows that China's accession to WTO had a negative short-term impact on corresponding series. But its long-term impact on China's export competitiveness was clearly positive. The short-term impact of the EU's CAP (Common Agricultural Policy) reform on Germany's exports to China was also negative. Its long-term impact on export competitiveness was sometimes positive and sometimes negative. The financial crisis of 2008 caused a significant reduction of China's agri-food exports to Germany. But Germany's exports to China in 2009 were not affected by the financial crisis as much.

Suggested Citation

  • Guo, Zhichao & Feng, Yuanhua & Tan, Xiangyong, 2011. "Short- and long-term impact of remarkable economic events on the growth causes of China–Germany trade in agri-food products," Economic Modelling, Elsevier, vol. 28(6), pages 2359-2368.
  • Handle: RePEc:eee:ecmode:v:28:y:2011:i:6:p:2359-2368
    DOI: 10.1016/j.econmod.2011.06.007
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    Citations

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    Cited by:

    1. Yuanhua Feng & Zhichao Guo & Christian Peitz, 2014. "A Tree-form Constant Market Share Model for Growth Causes in International Trade Based on Multi-level Classification," Journal of Industry, Competition and Trade, Springer, vol. 14(2), pages 207-228, June.
    2. Zhichao Guo & Yuanhua Feng & Thomas Gries, 2015. "Changes of China’s agri-food exports to Germany caused by its accession to WTO and the 2008 financial crisis," China Agricultural Economic Review, Emerald Group Publishing, vol. 7(2), pages 262-279, May.
    3. Fitrianto, Gigih & Widodo, Tri, 2017. "Generalized Constant Market Shares (G-CMS) Analysis: Composition and Partition Approach," MPRA Paper 79484, University Library of Munich, Germany.
    4. Yuanhua Feng & Zhichao Guo & Christian Peitz & Xiangyong Tan, 2011. "A tree-form constant market share analysis for modelling growth causes in international trade," Working Papers CIE 37, Paderborn University, CIE Center for International Economics.
    5. Zhichao Guo & Yuanhua Feng & Xiangyong Tan, 2011. "Impact of China's accession to WTO and the financial crisis on China's exports to Germany," Working Papers CIE 36, Paderborn University, CIE Center for International Economics.
    6. Guo, Zhichao & Feng, Yuanhua, 2013. "Modeling of the impact of the financial crisis and China's accession to WTO on China's exports to Germany," Economic Modelling, Elsevier, vol. 31(C), pages 474-483.

    More about this item

    Keywords

    Growth causes of agri-food trade; The CMS model; The EU's CAP reform; China's accession to WTO; Financial crisis;

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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