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Can the Japanese Agri-food Sectors Survive by Promoting their Exports?: A General Equilibrium Analysis with Farm Heterogeneity and Product Differentiation

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  • Nobuhiro Hosoe

    (National Graduate Institute for Policy Studies,Tokyo, Japan)

  • Yuko AkuneAuthor-X-Name-First: Yuko

    (Nihon University)

Abstract

Manufacturing industries have attracted research attention regarding roles of firm heterogeneity and product differentiation in the gnew new trade theory. h Agricultural sectors also produce new goods by product differentiation through breeding, food processing, quality-upgrading, and branding. In reaction to the recent globalization, the Japanese government has sought strategies to promote its domestic agri-food sectors by means of product differentiation and export promotion. This computable general equilibrium study examines the relevance of these policies by simulating hypothetical trade liberalization in agriculture and/or food. We show that agricultural trade liberalization would not increase Japan fs agricultural exports but would increase food exports; and that food trade liberalization would promote food exports. Both types of liberalization would increase domestic production in agri-food sectors through agri-food linkages and variety effects. This finding affords evidence of the relevance of product differentiation strategy through food processing and exportation, but not of agricultural export promotion strategy.

Suggested Citation

  • Nobuhiro Hosoe & Yuko AkuneAuthor-X-Name-First: Yuko, 2018. "Can the Japanese Agri-food Sectors Survive by Promoting their Exports?: A General Equilibrium Analysis with Farm Heterogeneity and Product Differentiation," GRIPS Discussion Papers 18-21, National Graduate Institute for Policy Studies.
  • Handle: RePEc:ngi:dpaper:18-21
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