Trade Creation, Diversion Effects and Exchange Rate Volatility in the Global Meat Trade

David Karemera (), Won Koo (), Gerald Smalls () and Louis Whiteside ()
Additional contact information
David Karemera: South Carolina State University, Postal: School of Business, South Carolina State University, 300 College, St NE, Orangeburg, SC 29117, USA
Won Koo: North Dakota State University, Postal: Department of Agribusiness & Applied Economics, North Dakota State University, Fargo, ND 58105, USA
Gerald Smalls: School of Business, Benedict College, Postal: School of Business, Benedict College, SC 29204, Columbia, USA
Louis Whiteside: South Carolina State University, Postal: 1890 Research, South Carolina State University, Orangeburg, SC 29117, USA

Journal of Economic Integration, 2015, vol. 30, issue 2, 240-268

Abstract: A modified gravity model is specified and applied to meat trade markets to identify factors affecting bovine and swine meat trade flows. The model is used to evaluate the effects of bilateral and regional free trade agreements. This study reveals that gravity models can be effectively parameterized and used in single commodity trade studies. Using data from 1986 to 2009, the results show that income, population, production capacity, distance, and exchange rate volatility are major factors affecting meat trade. The findings also demonstrate that the formation of the North American Free Trade Agreement and European Union significantly enhanced bovine and swine meat trade flows through trade creation among members and trade diversion from non-members to members. The Common Market of the South led to trade creation with inconclusive results for trade diversion while the Association of South-East Asian Nations led to trade diversion with no evidence of increased intra-bloc trade. The hoof-and-mouth disease significantly impaired bovine meat trade flows.

Keywords: Regional Free Trade Agreements; Trade Creation and Diversion; Exchange Rate Volatility; Bovine and Swine Meats; NAFTA; EU; ASEAN; MERCOSUR (search for similar items in EconPapers)
JEL-codes: F13 F15 F19 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.e-jei.org/current Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0658

Access Statistics for this article

Journal of Economic Integration is currently edited by Seongeun Kim

More articles in Journal of Economic Integration from Center for Economic Integration, Sejong University Contact information at EDIRC.
Bibliographic data for series maintained by Yunhoe Kim ().