Export Tax Reform and the Competitiveness of Imported Soybeans in China

Muhammad, Andrew; Valdes, Constanza

doi:10.1017/aae.2019.15

Cited by 4 publications

(5 citation statements)

References 21 publications

(19 reference statements)

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“…Following Seale et al (2003), Muhammad (2013), and Muhammad and Valdes (2019), a differenced version of the Almost Ideal Demand System (AIDS) is used in estimating Chinese cotton and yarn demand (Deaton & Muellbauer, 1980). Like other differential demand systems, the differenced AIDS is linear in coefficients and is therefore easy to estimate.…”

Section: Import Demand Modelmentioning

confidence: 99%

“…We estimate China's total import demand for cotton and yarn to account for the impact of prices on real aggregate expenditures. Following Theil (1980) and recent empirical applications (Muhammad & Valdes, 2019; Muhammad et al, 2012), total import demand is specified by the following relationship between real aggregate expenditures and prices:

∆ normalln \frac{E_{t}}{P_{t}} = ϕ (][, ∆ normalln p_{t}^{d} - ∆ normalln P_{t}^{'}) + \sum_{k = 1}^{12} γ_{k} d_{k} + φ ∆ normalln p_{t}^{mp} + ε_{t} .

…”

Section: Import Demand Modelmentioning

confidence: 99%

“…The second term is the total import effect, which is the effect of price changes on an import through changes in total import expenditures. Note that these two effects are respectively analogous to the substitution and income effect, or the trade diversion and creation effect (Muhammad & Valdes, 2019).…”

Section: Import Demand Modelmentioning

confidence: 99%

“…Based on Chalfant (1987) and , the Slutsky (compensated) ownprice and cross-price elasticities are respectively derived as follows: w 1 We estimate China's total import demand for cotton and yarn to account for the impact of prices on real aggregate expenditures. Following Theil (1980) and recent empirical applications (Muhammad & Valdes, 2019;Muhammad et al, 2012), total import demand is specified by the following relationship between real aggregate expenditures and prices:…”

Section: Import Demand Modelmentioning

confidence: 99%

“…The primary objective of this study is to examine how the COVID‐19 outbreak is affecting cotton import demand in China and the exporting countries that supply this market. Following Muhammad and Valdes (2019), we estimate China's import demand disaggregated by source (e.g., United States, Australia, Brazil, and India) and product form ( raw cotton and industrial yarn ), which allow for examining the competiveness of supplying countries in the Chinese market. We also estimate China's total import demand (aggregate expenditures on imported cotton and yarn), which is important when assessing the trade creation effect of price changes.…”

Section: Introductionmentioning

confidence: 99%

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COVID‐19 and cotton import demand in China

Muhammad

Smith

2020

Agribusiness

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As the leading import market for cotton, and leading export market for manufactured products like clothing and apparel, China provides the ideal case for examining how the COVID‐19 pandemic is affecting international cotton trade. The COVID‐19 outbreak has resulted in decreased global demand for products like clothing, directly affecting China's demand for cotton from exporting countries. In this study, we examined Chinese demand for imported cotton by product form (raw cotton and yarn) and by source (e.g., United States, India), as well as the dynamic price relationships across countries. Using year‐to‐date trade, demand estimates, and price forecasts, we assessed the impact of COVID‐19 on Chinese imports and the countries supplying this market. Depending on the projections, the most severe impacts of COVID‐19 on Chinese cotton imports are either behind us, or the latter half of 2020 could potentially be just as bad as the early part of the year. The outcome depends on the impact of manufactured‐product prices on imports; the effects of which are large but insignificant. As a consequence, even when imports from certain countries are projected to significantly decline, projection intervals suggest the possibility of a negligible decline or even a positive outcome.

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Section: Import Demand Modelmentioning

confidence: 99%