Tamini, Lota D. and Doyon, Maurice and Simon, Rodrigue (2012): Analyzing trade liberalization effect in egg sector using a dynamic gravity model.
Download (306Kb) | Preview
This study analyzes the effects of different liberalization scenarios in the international trade of eggs and egg products. We use a dynamic gravity model that takes into account the observed persistence of trading partners. The estimated parameters of the gravity model serve to quantify the impact of various liberalization scenarios on the probability of importing (extensive margin) and on trade volumes (intensive margin). The results indicate that even in the context of aggressive trade liberalization, trade gains at the extensive margin will be modest. Gains at the intensive margin of trade are present even in the context of partial liberalization - Doha-type - of trade.
|Item Type:||MPRA Paper|
|Original Title:||Analyzing trade liberalization effect in egg sector using a dynamic gravity model|
|Keywords:||Eggs and egg products, Persistence in trade, Trade liberalization, Gravity model, Random-effects dynamic Probit, Autoregressive panel|
|Subjects:||F - International Economics > F1 - Trade > F13 - Trade Policy; International Trade Organizations
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q1 - Agriculture > Q17 - Agriculture in International Trade
|Depositing User:||Lota Dabio Tamini|
|Date Deposited:||08. Jun 2012 00:29|
|Last Modified:||12. Feb 2013 13:14|
Abbassi, A., Bonroy, O and Gervais, J.P. 2008. Dairy Trade Liberalization Impacts in Canada. Canadian Journal of Agricultural Economics 56: 313-335.
Anderson, K. 2009. Distortions to Agricultural Incentives: A Global Perspective, 1955-2007 (Washington, DC: The World Bank).
Anderson, J. E. and van Wincoop, E. 2003. Gravity with Gravitas: a Solution to the Border Puzzle. American Economic Review 93: 170-192.
Arulampalam, W. and Stewart, M.B. 2009. Simplified Implementation of the Heckman Estimator of the Dynamic Probit Model and a Comparison with Alternatives Estimators. Oxford Bulletin of Economics and Statistics 71: 659-681.
Bchir, M.H., Jean, S. and Laborde, D. 2005. Binding overhang and Tariff cutting Formulas. CEPII Working Paper 18, Paris, France.
Bernard, A. B. and Jensen, J. B. 1999. Exceptional Exporter Performance: Cause, Effect, or both? Journal of International Economics 47: 1–25.
Campbell, D. L. 2010. History, Culture, and Trade: a Dynamic Gravity Approach. MPRA working paper.
Chaney, T. 2008. Distorted Gravity: the Intensive and Extensive Margins of International Trade. American Economic Review 98: 1707-1721.
Das, M., Robert, M. and Tybout, J.R. 2003. Market Entry Costs, Producer Heterogeneity and Export Dynamics. Econometrica 75: 837-873.
De Benedictis, L. and Vicarelli, C. 2005. Trade Potentials in Gravity Panel Models. Topics in Economic Analysis & Policy Volume 5, issue 1, article 20.
Debaere, P. and Mostashari, S. 2010. Do Tariffs Matter for the Extensive Margin of International Trade? An Empirical Analysis. Journal of International Economics 81: 163–169.
Disdier, A-C. and Head, K. 2008. The Puzzling Persistence of the Distance Effect on Bilateral Trade. The Review of Economics and Statistics 90: 37-48.
Egger, P. 2002. An Econometric View on the Estimation of Gravity Models and the Calculation of Trade Potentials. The World Economy 25: 297-312.
Egger, P. and Pfaffermayr, M. 2011. Structural Estimation of Gravity Models with Path-dependence Market Entry. CEPR Discussion Papers 8458.
Elamin, N. and Khaira, H. 2003. Tariff Escalation in Agricultural Commodity Markets. FAO Commodity Market Review, 101-120. Rome, Italy.
Feenstra, R. C. 2004. Advanced International Trade. Theory and Evidence. Princeton and Oxford: Princeton University Press.
Ghazalian P., Larue B. and Gervais. J-P. 2009. Exporting to New Destinations and the Effects of Tariffs: The Case of Meat Commodities. Agricultural Economics 40: 701-714.
Ghazalian, P.L., Tamini, L.D., Larue, B. and Gervais, J-P. (Forthcoming). A Gravity-based Framework when there are Vertical Linkages Between Markets with an Application to the Cattle/Beef Sector. Journal of International Trade and Economic Development. (DOI: 10.1080/09638199.2010.505297)
Grant, J.H., Hertel, T.W. and Rutherford, T.F. 2009. Dairy Tariff-Quota Liberalization: Contrasting Bilateral and Most Favored Nation Reform Options. American Journal of Agricultural Economics 91: 673–684.
Heckman, J. J. 1979. Sample Selection Bias as a Specification Error. Econometrica 47: 153-161.
Helpman, E., Melitz, M.J. and Rubinstein, Y. 2008. Estimating Trade Flow: Trading Partners and Trading Volumes. Quarterly Journal of Economics 123: 444-487.
Kandilov, I.T. and Zheng X. 2011. The Impact of Entry Costs on Export Market Participation in Agriculture. Agricultural Economics 42: 531-546.
Kim, M., Cho, G. D., Koo, W.W. 2003. Determining Bilateral Patterns using a Dynamic Gravity Equation. Agribusiness & applied economics report 525. North Dakota University.
Koo, W.W., Kennedy, P.L. and Skripnitchenko, A. 2006. Regional Preferential Trade Agreements: Trade Creation and Diversion Effects. Review of Agricultural Economics 28: 408-415.
Krinsky, I and Robb, A.L. 1986. On Approximating the Statistical Properties of Elasticities. Revew of Economics and Statistics 68: 715-719.
Meltiz, M. J. 2003. The impact of Trade on Intra-industry Reallocations and Aggregate Industry Productivity. Econometrica 71: 1695-1725.
Olivero, M. P. and Yotov, Y. 2012. Dynamic Gravity: Theory and Empirical Implications, Canadian Journal of Economics 45: 64-92.
Orme, C.D. 1997. The Initial Conditions Problem and Two-Step Estimation in Discrete Panel Data Models. Mimeo, Department of Economic Studies, University of Manchester, UK. Unpublished paper.
Orme, C.D. 2001. Two-step Inference in Dynamic non-linear Panel Data Models. School of Economic Studies, University of Manchester, mimeo, downloadable from: http://personalpages.manchester.ac.uk/staff/chris.orme/
OECD. 2003. The Doha Development Agenda: Welfare Gain from Further Multilateral Trade Liberalization with Respect to Tariffs. Available at www.oecd.org/trade under Publications and Documents/Reports (accessed 17 October 2011).
Paiva, C. 2005. Assessing Protectionism and Subsidies in Agriculture: A Gravity Approach. International Monetary Fund (IMF) Working Paper No. 05/21, Washington, D.C.
Rafjalovic, J. and Cardwell, R. 2010. The Implication of WTO Negotiations on the Canadian Chicken Market: two Representations of Chicken and Stochastic World Prices. CAPTPRN working paper 2010-07
Rude, J. I. and Gervais J-P. 2006. Tariff-rate Quota Liberalization: the Case of World price Uncertainty and Supply Management. Canadian Journal of Agricultural Economics 54: 33-54.
Sarker, R., and Jayasinghe, S. 2007. Regional Trade Agreements and Trade in Agri-food Products: Evidence for the European Union from Gravity Modeling using Disaggregated Data. Agricultural Economics 37: 93-104.
Segura-Cayuela R. and Vilarrubia, J. M. 2008. Uncertainty and Entry into Export Markets. Banco de Espana Working Papers 0811, Banco de España
Stewart, M.B. 2007. The interrelated Dynamics of Unemployment and Low-wage Employment. Journal of Applied Econometrics 22: 511-531.
Stewart, M. B. 2006. Maximum Simulated Likelihood Estimation of Random-effects Dynamic Probit Models with autocorrelated Errors. Stata Journal 6: 256-272.
Susanto, D., Rosson, C.P. and Adcock, F.J. 2007. Trade Creation and Trade Diversion in the North American Free Trade Agreement: the Case of Agricultural Sector. Journal of Agricultural and Applied Economics 39: 121-134.
Tamini, L.D., Gervais, J-P. and Larue, B. 2010. Trade Liberalisation Effects on Agricultural Goods at Different Processing Stages. European Review of Agricultural Economics 37: 453-477.
Vijay K. V. and Shahid S. 2011. An Estimation of the Latent bilateral Trade between India and Pakistan using Panel Data Methods. Global Economic Review 40: 45-65.
Wooldridge, J. M. 2005. Simple Solutions to the Initial Conditions Problem in Dynamic, nonlinear Panel Data Models with unobserved Heterogeneity. Journal of Applied Econometrics 20: 39–54.
Wooldridge, J. M. 2002. Econometric Analysis of Cross Section and Panel Data. Cambridge MA: MIT Press.
World Trade Organization. 2004. Word Trade Report. Exploring the Linkage Between the Domestic Policy Environment and International Trade. Available at: www.wto.org/english/res_e/reser_e/wtr_arc_e.htm. Accessed February 3, 2012.
World Trade Organization. 2008. Committee on agriculture special session. Revised draft modalities for agriculture. www.wto.org/english/tratop_e/agric_e/agchairtxt_july08_ e.pdf. Accessed March 31, 2012.