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Assessing the Impact of State Trading Enterprises


  • Arvin Pirness
  • M. Rose Olfert
  • Mark D. Partridge
  • William Hartley Furtan


State Trading Enterprises (STEs) are periodically subject to intense scrutiny for their suspected negative impact on the international trade of agricultural goods. Sound empirical assessment of the impact of STEs is scant, in spite of the ongoing and intense debate over their impacts, especially in the context of reform at the WTO. In this paper we use the case of world wheat trade between 2212 country pairs over a 35 year span to assess STE impacts. Using a gravity model, we estimate a Poisson pseudo maximum likelihood fixed effects model of world wheat trade to assess the role of both the presence of STEs and STEs with monopoly power. Further addressing estimation challenges, we also estimate zero-inflated versions of Poisson and Negative Binomial Regression models. We find consistent support for the hypothesis that monopoly export STEs are associated with higher exports for their host country. Similarly, import STEs appear to inhibit wheat imports, suggesting a protectionist function.

Suggested Citation

  • Arvin Pirness & M. Rose Olfert & Mark D. Partridge & William Hartley Furtan, 2012. "Assessing the Impact of State Trading Enterprises," International Economic Journal, Taylor & Francis Journals, vol. 26(4), pages 587-608, April.
  • Handle: RePEc:taf:intecj:v:26:y:2012:i:4:p:587-608
    DOI: 10.1080/10168737.2011.578145

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    References listed on IDEAS

    1. Steve McCorriston & Donald MacLaren, 2001. "State Trading Enterprises: Some Legal and Conceptual Issues," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 49(4), pages 415-428, December.
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