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Pricing to market and international trade evidence from US agricultural exports

Xu, Yun
http://rave.ohiolink.edu/etdc/view?acc_num=osu1158609695

Abstract Details

2006, Doctor of Philosophy, Ohio State University, Agricultural, Environmental and Development Economics.
This dissertation examines whether US exporters of agricultural commodities, including wheat, beef, pork, corn, soybean and lettuce, price to market in both a monopolistic and an oligopolistic framework. In a static monopolistic framework, considering the seasonality characteristics of prices and costs of agricultural products, a seasonal error correction model (SECM) is estimated. This study is the first one to apply the concepts of seasonal cointegration and seasonal common trends. In cases where seasonal cointegration is rejected by the hypothesis test, a vector error correction model (VECM) is used. The results from the cointegration method confirm strong imperfect competition and destination-specific characteristics of PTM behavior. Different price responses imply that under depreciations of the US dollar, exports to Japan, Canada, and the Philippines will increase but have a smaller effect on improving the US trade balance than in the case of perfect competition, while exports to South Korea, Mexico, Singapore, and Hong Kong will increase by a relatively small percentage, which results in an ambiguous impact on the US trade balance. In an oligopolistic framework, this study distinguishes different roles of the two exchange rates in export pricing strategies. The results show that imperfect competition exists in US wheat, beef, pork, and corn export markets. For beef, pork, and corn exports, the objective of US exporters is to keep local currency prices stable, which to some extent mitigates the export-enhancing effect of depreciations of the US dollar. The exceptional case is US wheat exports. Taking into account the huge export subsidies that US wheat exporters receive from the US Export Enhancement Program (EEP), US agricultural exporters tend to keep price-stabilizing strategies unless strong financial support from the government is available. Therefore, the depreciation of the US dollar is not sufficient for improving the US agricultural trade balance without governmental export supports. The real exchange rate exhibits a strong price-enhancing effect on export prices in most selected products except wheat, after the effect of the nominal exchange rate is taken into account.
Ian Sheldon (Advisor)
110 p.
Economics, Agricultural
pricing to market; seasonal and vector cointegration

Recommended Citations

Citations

  • Xu, Y. (2006). Pricing to market and international trade evidence from US agricultural exports [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1158609695

    APA Style (7th edition)

  • Xu, Yun. Pricing to market and international trade evidence from US agricultural exports. 2006. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1158609695.

    MLA Style (8th edition)

  • Xu, Yun. "Pricing to market and international trade evidence from US agricultural exports." Doctoral dissertation, Ohio State University, 2006. http://rave.ohiolink.edu/etdc/view?acc_num=osu1158609695

    Chicago Manual of Style (17th edition)

osu1158609695
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© 2006, all rights reserved.
This open access ETD is published by The Ohio State University and OhioLINK.