Hostname: page-component-586b7cd67f-2plfb Total loading time: 0 Render date: 2024-11-22T23:12:40.925Z Has data issue: false hasContentIssue false
  • English
  • Français

What impact does exchange rate volatility have on world turkey trade flows?

Published online by Cambridge University Press:  13 November 2014

C.G. DAVIS
C.G. DAVIS*
Affiliation:
Markets and Trade Economics Division, Economic Research Service, U.S. Department of Agriculture. 355 E Street, SW, Washington DC 20024, USA
*
Corresponding author: [email protected]
Get access

Abstract

A gravity model was used to determine the impact of exchange rate volatility on turkey trade flows. Previous analyses of aggregate agricultural sectors or products have assumed the effect of exchange rate volatility is uniform, that is, it impacts the individual components of the aggregates in the same way. This is highly unlikely, given the differences in biological and marketing factors across commodities and sectors. In order to address this issue, we examined how exchange rate volatility affects international turkey trade rather than the more commonly analysed ‘poultry’ trade. Findings revealed that the effects of short- and long-run exchange rate volatility on bilateral turkey trade are positive and statistically significant. Increasing distance between importing and exporting countries has a negative effect on turkey trade flows, while being a member of NAFTA and EU-27 has positive impacts on those flows.

Keywords

turkeyexchange rate volatilitygravity modelinternational trade
Type
Review Article
Information
World's Poultry Science Journal , Volume 70 , Issue 4 , December 2014 , pp. 775 - 786
Copyright
Copyright © World's Poultry Science Association 2014 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

ANDERSON, J.E. (1979) A theoretical foundation for the gravity equation. American Economic Review 69: 106-16.Google Scholar
ANDERSON, J.E. and VAN WINCOOP, E. (2003) Gravity with gravitas: a solution to the border puzzle. American Economic Review 93: 170-192.Google Scholar
ANDERSON, M. and GARCIA, P. (1989) Exchange rate uncertainty and the demand for U.S. soybeans. American Journal of Agricultural Economics 71: 721-729.Google Scholar
AWOKUSE, T.O. and YUAN, Y. (2006) The impact of exchange rate volatility on U.S. poultry exports. Agribusiness 22: 233-245.Google Scholar
BACCHETTA, P. and VAN WINCOOP, E. (2000) Does exchange -rate stability increase trade and welfare? American Economic Review 90: 1093-1109.Google Scholar
BERGSTRAND, J.H. (1985) The gravity equation in international trade: some microeconomic foundations and empirical evidence. Review of Economics and Statistics 67: 474-481.Google Scholar
BERGSTRAND, J.H. (1989) The generalised gravity equation, monopolistic competition, and the factor proportions theory in international trade. Review of Economics and Statistics 71: 143-153.CrossRefGoogle Scholar
BONROY, O., GERVAIS, J.P. and LARUE, B. (2007) Are exports a monotonic function of exchange rate volatility? Evidence from disaggregated pork exports. Canadian Journal of Economics 40: 127-154.CrossRefGoogle Scholar
CHO, G., SHELDON, I.M. and MCCORRISTON, S. (2002) Exchange rate uncertainty and agricultural trade. American Journal of Agricultural Economics 84: 931-942.Google Scholar
CHOWDHURY, A.R. (1993) Does exchange rate volatility depress trade flows? Evidence from error-correction models. The Review of Economics and Statistics 75: 700-706.Google Scholar
DAVIS, C.G., MUHAMMAD, A., KAREMERA, D. and HARVEY, D. (2014) Has exchange rate volatility affected broiler trade flows? Agribusiness 30 (1): 46-55.Google Scholar
DE GRAUWE, P. (1988) Exchange rate variability and the slowdown in growth of international trade. International Monetary Fund Staff Papers 35: 63-84.Google Scholar
DE GRAUWE, P. and SKUDELNY, F. (2002) The impact of EMU on trade flows. Weltwirschaftliches Archives 136: 383-402.Google Scholar
ESTIMA (2009) RATS User's Guide, Vol. 7.3, Evanston, ILGoogle Scholar
INTERNATIONAL MONETARY FUND International Financial Statistics, IMF and Washington DC.Google Scholar
JUST, R.E., HUETH, D.L. and SCHMITZ, A. (1982) Applied Welfare Economics and Public Policy, Englewood Cliffs, N.J.: Prentice-Hall, USA.Google Scholar
KANDILOV, I.T. (2008) The effects of exchange rate volatility on agricultural trade. American Journal of Agricultural Economics 90: 1028-1043.Google Scholar
KAREMERA, D., SMITH, W., OJAH, K. and COLE, J.A. (1999) A gravity model analysis of the benefits of economics integration in the pacific rim. Journal of Economic Integration 14: 347-367.Google Scholar
KAREMERA, D., MANAGI, S., REUBEN, L. and SPANN, O. (2011) The impacts of exchange rate volatility on vegetable trade flows. Applied Economics 43: 1607-1616.Google Scholar
KLEIN, M.W. (1990) Sectoral effects of exchange rate volatility on United States exports. Journal of International Money and Finance 9: 299-308.Google Scholar
KOO, W.W. and KAREMERA, D. (1991) Determinants of wheat trade flows and policy analysis. Canadian Journal of Agricultural Economics 39: 439-455.Google Scholar
KORAY, F. and LASTRAPES, W.D. (1989) Real exchange rate volatility and US bilateral trade: a VAR approach. The Review of Economics and Statistics 71: 708-712.Google Scholar
LANGLEY, S.V., GIUGALE, M., MEYERS, W.H. and HALLAHAN, C. (2000) International financial volatility and agricultural commodity trade: A primer. American Journal of Agricultural Economics 82: 695-700.Google Scholar
LINNEMANN, H. (1966) An Econometric Study of International Trade Flows. North-Holland Publishing Co., Netherlands.Google Scholar
MILJKOVIC, D., MARSH, J.M. and BRESTER, G.W. (2002) Japanese import demand for U.S. beef and pork: Effects on U.S. red meat exports and livestock prices. Journal of Agricultural and Applied Economics 34: 501-512.Google Scholar
MOLEDINA, A.A., ROE, T.L. and SHANE, M. (2010) Globalisation New Challenges: Macroeconomic, International Trade and Financial Issues, in: VIEIRA, I., VIEIRA, C., CALEIRO, A. & RICHTER, C. (Eds), pp. 248-263 (Saarbrucken, Germany: LAP LAMBERT. Academic Publishing).Google Scholar
OI, W.Y. (1961) The Desirability of Price Instability under Perfect Competition. Econometrica 27: 58-64.Google Scholar
PEREE, E. and STEINHERR, A. (1989) Exchange rate uncertainty and foreign trade. European Economic Review 33: 1241-1264.Google Scholar
PICK, D. (1990) Exchange rate risks and U.S. agricultural trade flows. American Journal of Agricultural Economics 72: 694-700.Google Scholar
SHELDON, I., MISHRA, S.K., PICK, D. and THOMPSON, S.R. (2013) Exchange rate uncertainty and US bilateral fresh fruit and fresh vegetable trade: an application of the gravity model. Applied Economics 45: 2067-2082.Google Scholar
U.S. DEPARTMENT OF AGRICULTURE Production, Supply and and Distribution (PS&D) database. Available at http://www.fas.usda.gov/psdonline/psdQuery.aspx. Accessed in August 2013.Google Scholar
WORLD BANK (2008) World Development Indicators, World Bank, Washington, DC.Google Scholar