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Consumer Demand and Cost Factors Shape the Global Trade Network in Commodity and Manufactured Foods

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  • Thomas L. Vollrath
  • Charles B. Hallahan
  • Mark J. Gehlhar

Abstract

Multiple forces operate throughout the global economy and influence the direction, composition, and volume of agri‐food trade. The fundamental determinants that impede and foster bilateral trade in two food types, namely staple commodities and manufactured products, are identified using generalized gravity equations. Empirical evidence verified the importance of relative resource endowments and similarities in the structure of partner demand. Other socio‐geo‐political factors were also found to influence food trade, including the ability of governments to control corruption and curtail disequilibrium in financial markets. L'économie mondiale est soumise à des forces multiples qui influencent l'orientation, la composition et le volume du commerce agroalimentaire. Les principaux facteurs qui entravent et favorisent le commerce bilatéral de deux types d'aliments, à savoir les matières de base et les produits manufacturés, ont été déterminés à l'aide d'équations de gravité généralisées. L'évidence empirique a vérifié l'importance des dotations relatives en ressources et des similarités dans la structure de la demande d'un partenaire commercial. D'autres facteurs sociaux et géopolitiques, y compris la capacité des gouvernements à combattre la corruption et à réduire le déséquilibre sur les marchés des capitaux, influenceraient aussi le commerce alimentaire.

Suggested Citation

  • Thomas L. Vollrath & Charles B. Hallahan & Mark J. Gehlhar, 2006. "Consumer Demand and Cost Factors Shape the Global Trade Network in Commodity and Manufactured Foods," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(4), pages 497-511, December.
    • Handle: RePEc:bla:canjag:v:54:y:2006:i:4:p:497-511
    DOI: 10.1111/j.1744-7976.2006.00063.x
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    References listed on IDEAS

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    1. Vollrath, Thomas L. & Grant, Jason H. & Hallahan, Charles B., 2012. "Reciprocal Trade Agreements: Impacts on U.S. and Foreign Suppliers in Commodity and Manufactured Food Markets," Economic Research Report 131618, United States Department of Agriculture, Economic Research Service.
    2. Thomas L. Vollrath & Mark J. Gehlhar & Charles B. Hallahan, 2009. "Bilateral Import Protection, Free Trade Agreements, and Other Factors Influencing Trade Flows in Agriculture and Clothing," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(2), pages 298-317, June.
    3. Sandberg, H. Mikael & Seale, James L., Jr., 2012. "The Impact of Historical and Regional Networks on Trade Volumes within the Western Hemisphere: A Gravity Analysis across Sectors," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 120071, Southern Agricultural Economics Association.
    4. Grant, Jason H. & Vollrath, Thomas L., 2010. "The New Wave Of Regionalism: Does Outsider/Insider Status Affect The Competitiveness Of U.S. Agricultural Exports?," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61144, Agricultural and Applied Economics Association.
    5. Grant, Jason H., 2010. "The Latest Wave of Regionalism: Does Outsider Status Affect the Competitiveness of U.S. and Canadian Agricultural Exports?," Working Papers 90888, Canadian Agricultural Trade Policy Research Network.
    6. Vollrath, Thomas L. & Hallahan, Charles B., 2011. "Reciprocal Trade Agreements: Impacts on Bilateral Trade Expansion and Contraction in the World Agricultural Marketplace," Economic Research Report 102755, United States Department of Agriculture, Economic Research Service.
    7. Andreas Chai, 2018. "Household consumption patterns and the sectoral composition of growing economies: A review of the interlinkages," Discussion Papers in Economics economics:201802, Griffith University, Department of Accounting, Finance and Economics.
    8. Štefan Bojnec & Imre Fertő, 2008. "European Enlargement and Agro‐Food Trade," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(4), pages 563-579, December.
    9. Malhotra, Nisha & Stoyanov, Andrey, 2008. "Analyzing the Agricultural Trade Impacts of the Canada-Chile Free Trade Agreement," Working Papers 46628, Canadian Agricultural Trade Policy Research Network.
    10. Kristjánsdóttir, Helga, 2008. "Exports under the Flicker of the Northern Lights," Economics Discussion Papers 2008-17, Kiel Institute for the World Economy (IfW Kiel).

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