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Determinants of World Demand for U.S. Corn Seeds: The Role of Trade Costs

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Abstract

The United States is a large net exporter of corn seeds. Seed trade, including that of corn, has been expanding, but its determinants are not well understood. This paper econometrically investigates the determinants of world demand for U.S. corn seeds with a detailed analysis of trade costs impeding export flows to various markets, including costs associated with distance, tariffs, and sanitary and phytosanitary (SPS) regulations. The analysis relies on a gravity-like model based on an explicit specification of derived demand for seed by foreign corn producers, estimated based on data from 48 countries and for the years 1989 to 2004. An SPS count variable is incorporated as a shifter in the unit cost of seeds faced by foreign users. A sample selection framework is used to account for the determination of which trade flows are positive. All trade costs matter and have had a negative impact on U.S. corn seed exports. Tariffs matter most, followed by distance and SPS measures.

Suggested Citation

  • Sampath Jayasinghe & John C. Beghin & GianCarlo Moschini, 2009. "Determinants of World Demand for U.S. Corn Seeds: The Role of Trade Costs," Center for Agricultural and Rural Development (CARD) Publications 09-wp484, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:cpaper:09-wp484
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    More about this item

    Keywords

    corn; distance; phytosanitary; seeds; SPS; tariff; technical barriers; trade cost.;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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