Determinants of Global Agricultural Trade

By: Devadoss, Stephen ; Ugwuanyi, Blessing ; Ridley. William


Devadoss, Stephen ; Ugwuanyi, Blessing ; Ridley. William, Determinants of Global Agricultural Trade, Journal of Agricultural and Resource Economics, Volume 47, Issue 3, September 2022, Pages 598-615

While comparative advantage factors expand agricultural trade, trade and domestic policies and gravity factors can either promote or hinder commodity trade. We use a theoretical multicountry trade model to analyze how various factors impact agricultural trade. Following previous literature, we model cross-country productivity differences using a probabilistic distribution. We then empirically implement the theoretical model to quantify the effects of various determinants of agricultural trade. Production-inhibiting policies and tariffs hinder bilateral trade, while domestic institutional quality, support programs, and land endowments expand bilateral trade.