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Spatial Price Dynamics and Asymmetric Price Transmission in Skim Milk Powder International Trade: Evidence from Export Prices for New Zealand and Ireland

Huidan Xue (), Chenguang Li () and Liming Wang ()
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Huidan Xue: School of Economics and Management, Beijing University of Technology, Beijing 100124, China
Chenguang Li: School of Agriculture and Food Science, University College Dublin, Belfield, Dublin 4, Ireland
Liming Wang: School of Economics and Management, Beijing University of Technology, Beijing 100124, China

Agriculture, 2021, vol. 11, issue 9, 1-20

Abstract: A fast-changing global landscape highlights the importance of understanding spatial price dynamics in key international markets such as China, especially in the era of COVID-19 pandemic with international food trade and food system experiencing an unprecedented challenge. Nowadays, New Zealand’s dominant position in China’s dairy import market is being challenged by European Union (EU) dairy exporters leading to intensified market competition. Using monthly export data of skim milk powder (SMP), we applied threshold cointegration models along with asymmetric error correction models to examine spatial price dynamics and price transmissions of New Zealand and Ireland in Chinese and global markets. We found that New Zealand’s export prices retain their leadership position in China, Ireland’s export prices are well more aligned with those in international markets. In terms of own-country price transmission, Ireland’s relatively symmetric and swift adjustments were found to contrast with New Zealand’s SMP export prices, which displayed more asymmetric price transmissions.

Keywords: threshold cointegration; asymmetric price transmission; skim milk powder; volatility (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2021
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