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What impact does exchange rate volatility have on world turkey trade flows?

Published online by Cambridge University Press:  13 November 2014

C.G. DAVIS
C.G. DAVIS*
Affiliation:
Markets and Trade Economics Division, Economic Research Service, U.S. Department of Agriculture. 355 E Street, SW, Washington DC 20024, USA
*
Corresponding author: chrisdavis@ers.usda.gov
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Abstract

A gravity model was used to determine the impact of exchange rate volatility on turkey trade flows. Previous analyses of aggregate agricultural sectors or products have assumed the effect of exchange rate volatility is uniform, that is, it impacts the individual components of the aggregates in the same way. This is highly unlikely, given the differences in biological and marketing factors across commodities and sectors. In order to address this issue, we examined how exchange rate volatility affects international turkey trade rather than the more commonly analysed ‘poultry’ trade. Findings revealed that the effects of short- and long-run exchange rate volatility on bilateral turkey trade are positive and statistically significant. Increasing distance between importing and exporting countries has a negative effect on turkey trade flows, while being a member of NAFTA and EU-27 has positive impacts on those flows.

Keywords

turkeyexchange rate volatilitygravity modelinternational trade
Type
Review Article
Information
World's Poultry Science Journal , Volume 70 , Issue 4 , December 2014 , pp. 775 - 786
Copyright
Copyright © World's Poultry Science Association 2014 

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