Modelling New Zealand dairy products: evidence on export survival and duration

Yangyuyu Luo and Sayeeda Bano

Australian Journal of Agricultural and Resource Economics, 2020, vol. 64, issue 3, 605-631

Abstract: This article presents evidence concerning the pattern of New Zealand dairy exports duration and survival from 1989 to 2017. It also analyses the influence of a set of supply, demand and gravity‐type drivers on the hazard rate for New Zealand dairy export relationships. The findings are summarised as follows. First, New Zealand dairy export relationships are dynamic with numerous entries and exits to and from foreign markets. Around half of the relationships survived for only 1–2 years at the sequence level. Second, duration of sequence, left‐censoring, initial export, decomposed sequences, New Zealand export price index, the number of cows available for dairy production, the number of origins and destinations, and destination partner’s GDP are the most significant factors reducing the hazard rate of export relationships. As regards the effects of the non‐tariff measures, it is interesting that technical barriers of trade are found to significantly decrease the hazard rate. Only pre‐shipment inspection and contingent trade protective measures are significant impediments to New Zealand dairy export relationships. Finally, hazard probabilities for New Zealand dairy export relationships are estimated to be ‘L‐shaped’ over time, whether or not non‐tariff measures are applied to New Zealand dairy products.

Date: 2020
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