TITLE:
Strategic Economic Partnerships, Exchange Rate Policy and Agricultural Trade: A Gravity Model Analysis of China’s Agricultural Trade Flows
AUTHORS:
Tadiwanashe Muganyi, Haibo Chen
KEYWORDS:
Gravity Model, Agricultural Trade, China
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.4 No.5,
May
16,
2016
ABSTRACT: Agricultural
trade in China is greatly influenced by government policy activities
particularly regional integration agreements, strategic economic partnerships
and exchange rate policy. China’s agricultural sector has grown significantly
in the past two decades however the factors that have led to this growth have
not been fully explored. This study applied the Gravity model in analyzing
China’s bilateral agricultural trade flows with its major agricultural trading
partners namely USA, Brazil, Japan, Thailand, Australia, Indonesia, Canada,
Malaysia, Russia and Hong Kong. The study utilized trade flow panel data
spanning over 15 years, from the year 2000 to 2014. Estimation results revealed
that economic size, market size, distance between capitals, annual average
market exchange rate, regional integration/strategic economic partnership
status, cultural beliefs and language were all significant factors in
explaining China’s bilateral agricultural trade flows for selected commodities
in the period under review.