The Law of One Price in International Trade: A Critical Review

Miljković, Dragan

doi:10.2307/1349976

Cited by 42 publications

(23 citation statements)

References 47 publications

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“…Most research, including ours, presumes that proportional transactions costs other than tariffs are small (Goodwin et al ., ; Miljkovic, ; Fafchamps and Gabre‐Madhin, ; Dawe and Maltsoglou, ). Factors that might make margins proportional include trade policy, market power and quality differences.…”

Section: Theoretical and Empirical Frameworkmentioning

confidence: 99%

Price Transmission in Nigerian Food Security Crop Markets

Hatzenbuehler¹,

Abbott²,

Abdoulaye³

2016

J Agricultural Economics

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This paper comprehensively examines price transmission from world, neighbour country, and internal commercial hub markets to Nigerian urban markets, as well as from urban to rural markets within the country, for seven key food security crops (maize, millet, sorghum, rice, cassava, yams and cowpeas). There are three key findings: (i) tradability matters for price transmission, but tradability varies across crops and regions. The strongest international linkages are with neighbouring countries. Rice price transmission is high across all markets, while coarse grain price correspondence is low with world prices but high with neighbour country market prices; (ii) our results imply that local conditions matter for price transmission, and are relatively more important than trade for some crops (e.g. yams, cassava) than others (e.g. imported rice, maize); (iii) larger than expected long‐run price transmission parameters in world and neighbour countries for rice and coarse grains suggest that, in these select markets, there are either large transactions costs or quality premiums that vary systematically with border prices, and/or mark‐ups captured by traders with market power.

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Section: Theoretical and Empirical Frameworkmentioning

confidence: 99%

Price Transmission in Nigerian Food Security Crop Markets

Hatzenbuehler¹,

Abbott²,

Abdoulaye³

2016

J Agricultural Economics

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“…2 2 Miljkovic (1999) and Barrett (2001) provide caveats to using cointegration methods here, particularly in testing for the LOP. …”

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confidence: 99%

Structural Breaks, the Export Enhancement Program and the Relationship between Canadian and US Hard Wheat Prices

Dawson¹,

Sanjuán²

2006

J Agricultural Economics

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This paper examines the long-term relationship between the export prices of Canadian and US hard wheat and the effects of the US Export Enhancement Program (EEP). Using monthly prices for 1974-2001, we adopt the cointegration procedure of Johansen "et al." (2000) which permits structural breaks. Results show that a long-term relationship exists, and there are two breaks that coincide with the EEP. The first break is in late 1985 when the long-term US/Canadian price ratio fell by 5.5%, while the second is in early 1995 when it increased by 9.2%. Weak exogeneity tests imply that Canada is the price leader, and impulse responses show that long-term equilibrium is restored within five months following a shock to either price. Copyright 2006 Blackwell Publishing Ltd.

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“…One of the primary methods used over the last two decades on empirical research into agricultural price transmission has been VEC model which is outlined below (Fackler and Goodwin 2001;Miljkovic, 1999;Listorti, 2009;Listorti and Esposti, 2012).…”

Section: Methodsmentioning

confidence: 99%

Price transmission in regional beef markets: Australia, China and Southeast Asia

2018

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With increasing trade volumes in the Asian region, it could be expected that beef markets are becoming increasingly integrated. Major beef exporters or importers can be expected to lead others, but others can be separated by obstacles to trade or small trade volumes. This paper examines price transmission between the key regional beef markets of Australia, China, Indonesia and Vietnam. It draws on quarterly price data from 2005 to 2015 and methods including co-integration analysis, granger causality test, and vector error correction model and impulse response function. The results show that log-run equilibrium relationships exist in two of the trading relationships, where the beef price in Indonesia is affected by the Australian market while the beef price in Vietnam is impacted by the Chinese market. However, Australia and China’s beef prices are not impacted by Indonesian or Vietnamese prices. Reasons behind these price inter-relationships are discussed.

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The Law of One Price in International Trade: A Critical Review

Cited by 42 publications

References 47 publications

Price Transmission in Nigerian Food Security Crop Markets

Price Transmission in Nigerian Food Security Crop Markets

Structural Breaks, the Export Enhancement Program and the Relationship between Canadian and US Hard Wheat Prices

Price transmission in regional beef markets: Australia, China and Southeast Asia

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