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

  • Jayasinghe, Sampath J.D.Y.
  • Beghin, John C.
  • Moschini, GianCarlo

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. �

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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 13018.

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Date of creation: 14 May 2010
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Publication status: Published in American Journal of Agricultural Economics 2010, vol. 92 no. 4, pp. 999-1010
Handle: RePEc:isu:genres:13018
Contact details of provider: Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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  1. Ghazalian, Pascal & Tamini, Lota & Larue, Bruno & Gervais, Jean-Philippe, 2007. "A Gravity approach to evaluate the significance of trade liberalization in vertically-related goods in the presence of non-tariff barriers," MPRA Paper 2744, University Library of Munich, Germany.
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  18. repec:lmu:muenar:20646 is not listed on IDEAS
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