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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, 2016, Boston, Massachusetts 235427, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea16:235427
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    File URL: http://purl.umn.edu/235427
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    References listed on IDEAS

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    1. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
    2. Balistreri, Edward J. & Hillberry, Russell H., 2007. "Structural estimation and the border puzzle," Journal of International Economics, Elsevier, vol. 72(2), pages 451-463, July.
    3. Jeffrey J. Reimer & Man Li, 2010. "Trade Costs and the Gains from Trade in Crop Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(4), pages 1024-1039.
    4. Patrick A. Messerlin & Jamel Zarrouk, 2000. "Trade Facilitation: Technical Regulations and Customs Procedures," The World Economy, Wiley Blackwell, vol. 23(04), pages 577-593, April.
    5. Paul Brenton & John Sheehy & Marc Vancauteren, 2001. "Technical Barriers to Trade in the European Union: Importance for Accession Countries," Journal of Common Market Studies, Wiley Blackwell, vol. 39(2), pages 265-284, June.
    6. Khan, Imran Ullah & Kalirajan, Kaliappa, 2011. "The impact of trade costs on exports: An empirical modeling," Economic Modelling, Elsevier, vol. 28(3), pages 1341-1347, May.
    7. Cathy L. Jabara & Robert L. Thompson, 1980. "Agricultural Comparative Advantage under International Price Uncertainty: The Case of Senegal," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(2), pages 188-198.
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    More about this item

    Keywords

    agricultural competitiveness; gross and net openness to imports; gross competitiveness; infrastructural efficiency.; Agricultural and Food Policy; Demand and Price Analysis; International Relations/Trade; F11; F13; F14; F18; O19; Q17; Q54.;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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