Determinants of World Demand for U.S. Corn Seeds: The Role of Trade Costs Report as inadecuate

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The United States is a large net exporter of corn seeds. Seed trade, including that of corn, has been expanding, but its determinants are not well understood. This paper econometrically investigates the determinants of world demand for U.S. corn seeds with a detailed analysis of trade costs impeding export flows to various markets, including costs associated with distance, tariffs, and sanitary and phytosanitary (SPS) regulations. The analysis relies on a gravity-like model based on an explicit specification of derived demand for seed by foreign corn producers, estimated based on data from 48 countries and for the years 1989 to 2004. An SPS count variable is incorporated as a shifter in the unit cost of seeds faced by foreign users. A sample selection framework is used to account for the determination of which trade flows are positive. All trade costs matter and have had a negative impact on U.S. corn seed exports. Tariffs matter most, followed by distance and SPS measures.

Keywords: corn ; distance ; phytosanitary ; seeds ; SPS ; tariff ; technical barriers ; trade cost.

Subject(s): Demand and Price Analysis

Crop Production/Industries

International Relations/Trade

Issue Date: 2009-01

Publication Type: Working or Discussion Paper

PURL Identifier:

Total Pages: 26

Series Statement: CARD Working Paper

09-WP 484

Record appears in: Iowa State University > Center for Agricultural and Rural Development (CARD) > CARD Working Paper Series

Author: Jayasinghe, Sampath ; Beghin, John C. ; Moschini, GianCarlo


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