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Dynamic and spillover effects of USA import refusals on China's agricultural trade: Evidence from monthly data

Agricultural economics (Praha), 2019-01, Vol.65 (9), p.425-434 [Peer Reviewed Journal]

2019. This work is published under https://www.agriculturejournals.cz/web/about/ (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;ISSN: 0139-570X ;EISSN: 1805-9295 ;DOI: 10.17221/15/2019-AGRICECON

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  • Title:
    Dynamic and spillover effects of USA import refusals on China's agricultural trade: Evidence from monthly data
  • Author: Zhou, Jiehong ; Wang, Yu ; Mao, Rui
  • Subjects: agricultural exports ; Developed countries ; Developing countries ; Exports ; import refusals ; Imports ; International trade ; LDCs ; panel structural vector autoregression ; spillover effects ; Trade
  • Is Part Of: Agricultural economics (Praha), 2019-01, Vol.65 (9), p.425-434
  • Description: Border inspections by developed nations are an essential export barrier to developing countries. Import refusals, in particular, not only exhibit dynamic impacts on exporters’ performance in the refused destination but may also spill over into exports toward third markets. Using a panel structural vector autoregression model, the complete dynamics of China’s agricultural export in response to United States Food and Drug Administration (FDA) import refusals is estimated at the monthly level. Despite notable heterogeneities across sectors, negative and positive reactions that last mostly less than a year are revealed respectively for the quantity and price of China’s exports to USA on average. The impact of idiosyncratic component dominates that of common component in the refusal shock, highlighting the sensitivity of exports to sector-specific border inspections. Relative to other refusal charges, larger export contractions tend to follow adulteration charges. The trade effect of FDA refusals spills over into other main export destinations of China. While non-adulteration charges result in trade deflections on average, a contagious export reduction is observed in most non-US markets. These results provide insights for exporters to make strategies with a focus on specific sectors, charges, third markets and especially on the short run to cope with import refusals.
  • Publisher: Prague: Czech Academy of Agricultural Sciences (CAAS)
  • Language: English;Czech
  • Identifier: ISSN: 0139-570X
    EISSN: 1805-9295
    DOI: 10.17221/15/2019-AGRICECON
  • Source: ProQuest Central
    DOAJ Directory of Open Access Journals

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