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Asymmetric Trade Flows and Their Implication for Competitiveness, Efficiency and Trade

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  • Lee, Youngjae
  • Kennedy, Lynn

Abstract

The asymmetric trade flow of agricultural goods can serve as a clue to help understand unobservable agricultural competitiveness, infrastructural efficiency for exports, and net openness to imports. In order to identify these three factors from agricultural trade data, we adapt a trade model developed by Eaton and Kortum. Unlike Eaton and Kortum, we interpret specific country dummy variables as proxies representing these three factors. This study makes four important findings. First, agricultural trade flow is strongly related to net openness to imports but less to agricultural competitiveness. Second, agricultural competitiveness is more related to land endowments than economic development. Third, economic development improves infrastructural efficiency for agricultural exports. Finally, existing agricultural import restrictions are shown to be punitive.

Suggested Citation

  • Lee, Youngjae & Kennedy, Lynn, 2016. "Asymmetric Trade Flows and Their Implication for Competitiveness, Efficiency and Trade," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235427, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235427
    DOI: 10.22004/ag.econ.235427
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    References listed on IDEAS

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    Keywords

    Agricultural and Food Policy; Demand and Price Analysis; International Relations/Trade;
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