Three Essays on Applied International Trade Analysis

Abstract

This research which addresses factors that impact the global fish market in terms of price and trade flows is presented through three chapters. The first chapter determines the effects of income and population growth on the world fish price and on welfare in net exporting and net importing regions by using the excess demand-supply model. The simulation results suggest that both income and population growth cause fish price to increase by between 0.25% and 1.20%. As a result of higher price, the welfare in the net exporting countries increases and welfare in the net importing regions decreases. However, the overall net gains to producers and consumers in the two regions combined are positive. The second chapter ascertains potential factors triggering FDA’s import refusals within three categories of food, drugs, and cosmetics during the period of 2002 to 2013. Results from the panel dynamic GMM model suggest that FDA’s decisions are not only influenced by a product’s quality and safety but also by a number of other factors. These factors include lobbying pressure, economic development, FDA’s human resource capacity, and reputation of neighboring countries. In addition, this chapter also supports the work of former researchers by indicating that US import refusals are dependent on past history. The last chapter analyzes effects of exchange rate on the international price of shrimp and trade flows and includes price transmission elasticity tests. Results from both the Fully Modified OLS and autoregressive Distributed Lag Models indicate that omission of transportation costs in LOP tests causes estimated elasticity of price transmission (EPT) to be underestimated by 30%, and also causes over-rejection of the LOP. The excess supply-demand model of US shrimp import indicates understated EPTs, and this causes exchange rate pass-through to be understated. Similarly, an increase in transportation costs has the same effect on US price and import quantities as does a depreciating US dollar. Moreover, under policy effecting analysis, most of the incidence of a change in exchange rate and transportation costs is borne by foreign producers, because the import demand elasticity is relatively larger than the export supply elasticity.