Catalyst or barrier? Impact of cereal trade on urbanization

Clarifying the impact of cereal trade on urbanization is crucial for enhancing effective food security policies and promoting sustainable urban development. However, the heterogeneous impact of the cereal trade on urbanization remains underexplored. This study applies international trade theory to explore the causal effects and supplements panel data on 216 economies from 1990 to 2018 using two-stage least squares regression (2SLS). The results show that both cereal exports and imports significantly promote urbanization, with the magnitude of imports being higher than that of exports. Furthermore, global cereal trade promotes urbanization in both emerging and developed economies. The findings provide insights for policymakers on how to leverage adjustments in cereal trade policies to enhance urbanization, particularly in economies striving to balance food security with urban development.This study explores how the trade of cereals – such as wheat and rice – affects the growth of cities worldwide. By examining data from 216 countries over nearly three decades, we discovered that countries that export or import cereals tend to see more urban development. The impact of importing cereals on city growth is even stronger than that of exporting them. This finding is crucial for countries looking to balance their food needs with urban expansion. It suggests that managing the cereal trade can be a strategy to enhance urbanization while ensuring food security. Our research provides a fresh perspective on the global discussion about how trade policies can influence the development of urban areas, offering insights for policymakers on fostering sustainable cities.