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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

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

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.

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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 28 (2011)
Issue (Month): 6 ()
Pages: 2359-2368

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Handle: RePEc:eee:ecmode:v:28:y:2011:i:6:p:2359-2368
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