The Trade Effect of Trust: Evidence from Agricultural Trade between China and Its Partners

High trust is a booster of trade development, while low trust is a stumbling block. The trust between two countries (regions) will be beneficial to sustainable development for bilateral trade. To investigate the impact of trade partners’ trust on the scale of China’s agricultural export trade, we put trust into the analytical models of international trade, propose a research hypothesis based on the transaction cost economics theory, and construct an extended gravity model for empirical tests. The results show that the level of trust affects the scale of export trade by affecting the size of transaction costs. Higher trust produces trade creation effect, while lower trust produces trade barrier effect. The trade partner’s trust significantly affects the scale of China’s agricultural export trade, and the effect is heterogeneous at different percent quartiles. Even after controlling the endogeneity, the conclusion still holds. We suggest that, in the international trade of agricultural products, the government should constantly improve the quality of formal institution, attach importance to constructing of the informal institution of trust and enhance the social trust to facilitate the development of agricultural trade.

Assymmetric effect exchange rate to Indonesian agriculture subsector

This study explores the asymmetric effect on the rupiah exchange rate on every subsector agriculture export in Indonesia during 2006-2020. The non-linear ARDL method is used in this study to analyze the asymmetric relationship between exchange rate and export. NARDL method includes short-run and long-run coefficient estimates and embraces the asymmetric effect. The previous studies generally used the linear models on the aggregated data and ignored the differences in each export of the agricultural sub-sector, then they offered ambiguous results. The latest studies have preferred to use the method of NARDL on the agricultural sector in general data. Instead of using agricultural export data for each subsector, this paper considers subsector export data of agriculture. The estimated NARDL results indicate an asymmetric effect of the rupiah exchange rate on exports of the agricultural sub-sector in the long run. In general, there is no asymmetric effect in the short run. Generally, depreciation and appreciation of the Rupiah have a negative effect on exports of the agricultural sub-sector in the long run. However, rupiah appreciation positively impacts lag 2, and depreciation caused a different effect on each sub-sector. The NARDL results suggest that positive movements have lesser impacts than those of negative movements in the exchange rate on the agriculture sector both in the short and long run

Determinants of trade flow of some selected non-traditional agricultural export commodities in Nigeria

This study analysed the determinants of trade flow of some selected non-traditional agricultural export commodities in Nigeria, for the period 2007 to 2017. The objective of the study was to analyse the factors that determine the export of these commodities. The study used trade data of thirty-six importing countries of these commodities around the world. The secondary data used was sourced from various institutions’ databases. A balanced panel data from 36 countries for the years 2007-2017 were used with one dependent variable and ten explanatory variables (a total of n=396, N=36, and T=11); all variables were expressed in natural logarithm. The gravity estimation model was used in data analysis. The Hausman test was used in model selection and the test rejected the null hypothesis (random effects were efficient). Therefore, the fixed effects model was used in the gravity model results’ interpretation. The gravity model results indicate that Nigeria’s export of non-traditional commodities (classified as HS12 in the United Nations International Trade Statistics) follows the basic gravity model apriori expectations, implying that bilateral trade flows will increase in proportion to the trading partner’s Gross Domestic Product (GDP) and decrease in proportion to the distance involved.The level of openness of Nigeria’s economy and that of the importing countries were major determinants of trade flow of Nigeria’s HS12 commodity exports. This variable carried the expected positive sign for both Nigeria and its trading Partners and was also statistically significant at the 5% level. However, the real exchange rate variable was not a major determinant of HS12 commodity trade. The distance variable was statistically significant indicating the need for regional trade expansion. The dummy variable of the trading partner being an African country was positive and a significant factor in the determinants of the HS12 commodities. However, colonial or official language ties were negatively signed and significant, implying that this was not a major contributor to trade in these commodities. The study recommends that favorable import and export promotion policies and trade openness to boost growth in the quantity of non-traditional exports should form part of government trade policies; and Nigeria should also take advantage of the proposed African Free Trade Area considering the gains she stands to make through proximity in distance.

Globalisation, Logistics and Food Supply: Evidence from Vietnam

Most countries satisfy domestic food consumption by importing from foreign supplies, thus highlighting the role of agricultural exports in maintaining and diversifying the global food supply. In the age of globalisation, whether the flourishing number of regional trade agreements (RTAs) has been facilitating greater market access of agricultural and food products is questioned by national governments. Meanwhile, logistics performance has been the bottleneck of emerging economies, which exerts negative impacts on agricultural export competitiveness in foreign markets. Overall, the interlink between globalisation, logistics and food supply has not been addressed adequately. Therefore, this paper employs the trade gravity model to examine the relationship between agricultural exports, RTAs membership, and logistics performance in the case of Vietnam and her 97 major trading partners. Static and dynamic panel data estimation are employed with the methods applied to solving the zero trade and endogeneity concerns. Findings confirm the interlink between globalisation, logistics and food supply. RTAs-based globalisation and logistics policies are intertwined to secure and diversify import-driven food supply. The unified framework for long-term and sustainable development which aims at strengthening the interlink between globalisation, logistics, agriculture and global food supply should be considered in policy formulation.

The impacts of economic globalization on agricultural value added in developing countries

Countries in the world have various indices for the implementation of economic globalization (EG). This refers to positive and negative impacts arising from its implementation, especially in agriculture. This sector is still a basic source of existence in developing countries. At the same time, these countries have been unable to optimize their agricultural value-added (AVA) and only earn a low level of income. That way, developing countries need to take advantage of EG to increase income from agricultural exports and farmers’ welfare. Other than that, there has been no study examining the impacts of EG on AVA in developing countries. So, this study intends to evaluate the impacts of the exchange rates, foreign direct investment (FDI) inflows, total agricultural export values, agricultural import duties, and fertilizer imports on AVA in developing countries. The panel data technique is used to assess its impact in 17 developing countries during 2006–2018. The study showed that FDI inflows and agricultural export values increase AVA in developing countries. In this study, EG positively impacts developing countries, but its implementation must pay attention to achieve sustainable development goals. We recommend developing countries focus on investments in human capital and technologies (or R&D), ensure foreign investors collaborate with local agricultural firms, increase agricultural exports, and create a conducive economic system

Trickle Down Development? The Expansion of Asparagus Exports and Water Availability for Urban Marginal Groups in Ica, Peru

<p>This thesis explores the neoliberal approach to development and its influence on resource management in Latin America using a case study of Peru. Peru’s neoliberal reforms, beginning in 1990s, were successful in fostering macro-economic growth and helping the country reverse its dismal economic performance of the 1970s and 1980s. Promoted by neoliberal policies natural resource export booms, including in the non-traditional agricultural export (NTAX) sector, have contributed to Peru’s economic success. However, this overall economic growth has exacerbated the pre-existing inequalities of Peru. By applying an analysis inspired by structuralist and dependency theories, this thesis critically examines Peru’s NTAX expansion to understand why ‘underdevelopment’ and the country’s position as a ‘resource periphery’ has continued to take place. This study focuses on the rapid expansion of fresh asparagus exports in the Ica Valley following the 1990 reforms. Fresh asparagus production in the Ica Valley represents the flagship of Peru’s NTAX boom, with the industry generating economic growth and eradicating the area’s previously high unemployment. However, the industry has also concentrated water access and worsened water non-availability and inequalities in the valley. These problems are disproportionately affecting Ica’s marginalised population, yet limited work has documented how marginal urban groups are being impacted. This research therefore investigates how the asparagus export boom has affected Ica’s marginal urban groups and their access to water. In doing so, it critically studies the withdrawal of the state from development planning and resource management. Additionally, this research seeks to connect the rural and urban spheres, which are commonly and problematically separated in development study, through a contemporary example of the resource curse argument.</p>

Trickle Down Development? The Expansion of Asparagus Exports and Water Availability for Urban Marginal Groups in Ica, Peru

<p>This thesis explores the neoliberal approach to development and its influence on resource management in Latin America using a case study of Peru. Peru’s neoliberal reforms, beginning in 1990s, were successful in fostering macro-economic growth and helping the country reverse its dismal economic performance of the 1970s and 1980s. Promoted by neoliberal policies natural resource export booms, including in the non-traditional agricultural export (NTAX) sector, have contributed to Peru’s economic success. However, this overall economic growth has exacerbated the pre-existing inequalities of Peru. By applying an analysis inspired by structuralist and dependency theories, this thesis critically examines Peru’s NTAX expansion to understand why ‘underdevelopment’ and the country’s position as a ‘resource periphery’ has continued to take place. This study focuses on the rapid expansion of fresh asparagus exports in the Ica Valley following the 1990 reforms. Fresh asparagus production in the Ica Valley represents the flagship of Peru’s NTAX boom, with the industry generating economic growth and eradicating the area’s previously high unemployment. However, the industry has also concentrated water access and worsened water non-availability and inequalities in the valley. These problems are disproportionately affecting Ica’s marginalised population, yet limited work has documented how marginal urban groups are being impacted. This research therefore investigates how the asparagus export boom has affected Ica’s marginal urban groups and their access to water. In doing so, it critically studies the withdrawal of the state from development planning and resource management. Additionally, this research seeks to connect the rural and urban spheres, which are commonly and problematically separated in development study, through a contemporary example of the resource curse argument.</p>

Is the Foreign Investment Matter for the Agricultural Export?

The idea that foreign investments can help developing countries to increase their economic growths and exports may not be fulfilled recently. However, many economists, world organizations and country governments still defend that idea. This study is aimed to compare impacts of foreign and local direct investments to agricultural exports. Quantitative data is obtained from some publications of Indonesian government. This research uses Ordinary Least Square Regression method to analyze relations between foreign and local direct investments with agricultural exports. This research found that foreign direct investments has a nonsignificant effect on agricultural exports, but local investment has a positive significant effect.