This paper analyzes the motivator and obstructive elements influencing trade of four kinds of vegetable oil by using the generalized gravity model. The balanced panel dataset used in the analysis includes bilateral trade spans 80 countries for the period from 2000 to 2013. Empirical results reveal that importer’s GDP plays a leading role to boosting four kinds of vegetable oils trade and there is a positive impact of oilseeds trade on vegetable oil trade and bilateral exchange rate has nothing to do with the vegetable oil trade.
KeywordsBilateral TradeVegetable OilGravity Model
Josling, T., Tangermann, S. and Warley, T.K. (1996) Agriculture in the GATT. Macmillan and St. Martin’s Press, New York. http://dx.doi.org/10.1057/9780230378902
Meilke, K., Wensley, M. and Cluff, M. (2001) The Impact of Trade Liberalization on the International Oilseed Complex. Review of Agricultural Economics, 1, 2-17. http://dx.doi.org/10.1111/1058-7195.00042
In, F. and Inder, B. (1997) Long-Run Relationships between World Vegetable Oil Prices. The Australian Journal of Agricultural and Resource Economics, 4, 455-470. http://dx.doi.org/10.1111/1467-8489.00024
Vollrath, T.L., Gehlhar, M.J. and Hallahan C.B. (2009) Bilateral Import Protection, Free Trade Agreements, and Other Factors Influencing Trade Flows in Agriculture and Clothing. Journal of Agricultural Economics, 2, 298-317. http://dx.doi.org/10.1111/j.1477-9552.2008.00186.x
Robinson, S., Burfisher, M.E., Hinojosa-Ojeda, R., et al. (1993) Agricultural Policies and Migration in a US-Mexico Free Trade Area: A Computable General Equilibrium Analysis. Journal of Policy Modeling, 5-6, 673-701. http://dx.doi.org/10.1016/0161-8938(93)90009-F
Park, I. (2006) East Asian Regional Trade Agreements: Do They Promote Global Free Trade? Pacific Economic Review, 4, 547-568. http://dx.doi.org/10.1111/j.1468-0106.2006.00334.x
Baier, S.L. and Bergstrand, J.H. (2004) Economic Determinants of Free Trade Agreements. Journal of International Economics, 1, 29-63. http://dx.doi.org/10.1016/S0022-1996(03)00079-5
Pujiati, R., Firdaus, M., Adhi, A.K., et al. (2014) The Impact of Regional Trade Agreements to the Commodity Trade Flows. Forum Agribisnis, 2, 193-206.
Zahniser, S.S., Pick, D., Pompelli, G., et al. (2002) Regionalism in the Western Hemisphere and Its Impact on U.S. Agricultural Exports: AGravity-Model Analysis. American Journal of Agricultural Economics, 3, 791-797. http://dx.doi.org/10.1111/1467-8276.00338
Kavallari, A., Maas, S. and Schmitz, P.M. (2010) Evidence on Euromediterranean Trade Integration: The Case of German Olive Oil Imports. German Journal of Agricultural Economics, 1, 40-46.
Vlontzos, G. and Duquenne, M.N. (2008) Greek Olive Oil: How Can Its International Market Potential Be Realized? The Estey Centre Journal of International Law and Trade Policy, 9, 32-47.
Rottgers, D., Faβe, A. and Grote, U. (2009) Analysing the EU Canola Oil Trade with Developing Countries: A Gravity Model Approach. Conference on International Research on Food Security, Natural Resource Management and Rural Development, Hamburg, 6-8 October 2009.
Tinbergen, J. (1962) Shaping the World Economy: Suggestions for an International Economic Policy. Twentieth Century Fund, New York.
Pullianen, K.A. (1963) A World Trade Study: An Econometric Model of the Patterns of the Commodity Flows in International Trade 1948-1960. Economiska Samfundets Tidskrift, 16, 78-91.
Anderson, J.E. (1979) A Theoretical Foundation for the Gravity Equation. American Economic Review, 69, 106-116.
Helpman, E. and Krugman, P.R. (1985) Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy. MIT Press, Cambridge, MA.
Bergstrand, J.H. (1985) The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence. The Review of Economics and Statistics, 67, 474-481. http://dx.doi.org/10.2307/1925976
Bergstrand, J.H. (1989) The Generalized Gravity Equation, Monopolistic Competition and the Factor-Proportions Theory in International Trade. The Review of Economics and Statistics, 71, 143-153. http://dx.doi.org/10.2307/1928061
Deardorff, A.V. (1998) Determinants of Bilateral Trade Flows: Does Gravity Work in a Neoclassical World. In: Frankel, J.A., Ed., The Regionalization of the World Economy, The University of Chicago Press, Chicago.
Evenett, S.J. and Keller, W. (2002) On Theories Explaining the Success of the Gravity Equation. Journal of Political Economy, 110, 281-316. http://dx.doi.org/10.1086/338746
Anderson, J.E. and van Wincoop, E. (2003) Gravity with Gravitas: A Solution to the Border Puzzle. American Economic Review, 93, 170-192. http://dx.doi.org/10.1257/000282803321455214
Anderson, J.E. and van Wincoop, E. (2004) Trade Costs. Journal of Economic Literature, 42, 691-751. http://dx.doi.org/10.1257/0022051042177649
Feenstra, R.C. (2004) Advanced International Trade: Theory and Evidence. Princeton University Press, Princeton.
Frankel, J., Stein, E. and Wei, S.J. (1993) Continental Trading Blocs: Are They Natural or Supernatural? University of Chicago Press, Chicago. http://dx.doi.org/10.3386/w4588
Philippidis, G., Resano-Ezcaray, H. and Sanjuán-López, A.I. (2013) Capturing Zero-Trade Values in Gravity Equations of Trade: An Analysis of Protectionism in Agro-Food Sectors. Agricultural Economics, 44, 141-159. http://dx.doi.org/10.1111/agec.12000
Burger, M.J., van Oort, F.G. and Linders, G.M. (2009) On the Specification of the Gravity Model of Trade: Zeros, Excess Zeros and Zero-Inflated Estimation. Spatial Economic Analysis, 4, 167-190. http://dx.doi.org/10.1080/17421770902834327
Wooldridge, J.M. (2002) Econometric Analysis of Cross Section and Panel Data. MIT Press, Cambridge, MA.
Santos Silva, J.M.C. and Tenreyro, S. (2006) The Log of Gravity. The Review of Economics and Statistics, 88, 641-658. http://dx.doi.org/10.1162/rest.88.4.641
Marlin, W. and Pham, C. (2008) Estimating the Gravity Model When Zero Trade Flows Are Frequent. Working Paper, World Bank, Washington DC.
Eichengreen, B. and Irwin, D.A. (1998) The Role of History in Bilateral Trade Flows. In: Frankel, J., Ed., The Regionalization of the World Economy, National Bureau of Economic Research, University of Chicago Press, Chicago.
Santos Silva, J.M.C. and Tenreyro, S. (2011) Further Simulation Evidence on the Performance of the Poisson Pseudo-Maximum Likelihood Estimator. Economics Letters, 112, 220-222. http://dx.doi.org/10.1016/j.econlet.2011.05.008
Francois, J. and Manchin, M. (2006) Institutional Quality, Infrastructure and the Propensity to Export. Working Paper, Centro Studi Luca D’Agliano, Università degli Studi di Milano, Milano.
Balu, N. and Ismail, N. (2011) Free Trade Agreement—The Way Forward for the Malaysian Palm Oil Industry. Oil Palm Industry Economic Journal, 2, 26-35.
Linder, S.B. (1961) An Essay on Trade and Transformation. Almqvist & Wiksells, Stockholm.
Dalgin, M., Trindade, V. and Mitra, D. (2008) Inequality, Nonhomothetic Preferences, and Trade: A Gravity Approach. Southern Economic Journal, 74, 747-774.
Cameron, A.C. and Trivedi, P.K. (1998) Regression Analysis of Count Data. Cambridge University Press, Cambridge. http://dx.doi.org/10.1017/CBO9780511814365
Gehlhar, M. (1996) Reconciling Bilateral Trade Data for Use in GTAP. Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project, Technical Papers, Statistics Canada.