The Main Determinants of Taiwan Agricultural Exports: A Border Effect Analysis
Date Issued
2010
Date
2010
Author(s)
Ko, Sih-Yin
Abstract
This article applies gravity model to analyze the main determinants of Taiwan agricultural exports during 1992 to 2008. Especially the border effect between Taiwan and China is mainly stressed in the research. Results showed that trading partners’ per capita GDP and population had positive effect on Taiwan agricultural exports, but the distance factor had negative effect on it. Contrary to the prior studies, importing countries’ land area had no significant influence on Taiwan agricultural exports. The reason may be explained by specialization in agricultural production of Taiwan’s trading partners recently.
Although people lived in China had the same preference as Taiwanese in agric-products demanding, China had significant negative relations with Taiwan agricultural exports under “early mutual free trade” and “no haste, be patient” trading policies from1992 to 1998. The border effect existed causing Taiwan exported less agric-products to China in those years, but the effect became less intensive gradually at the time. If there were no border effect, the exporting volume would be more. Moreover, the trading relations with China were insignificant from 1999 to 2008, but the coefficients had rising trends with the time passed by. Especially after year 2003, the coefficients transformed from negative to positive. The results contrary to the prior studies, and implied that the policies Taiwan government made had larger effect on agricultural export to China than on industrial trade with China. So, the government trade policies played an important role in Taiwan’s agric-products export to China. If Taiwan sign ECFA contract with China these days, it is expected that the agricultural exporting volume of Taiwan to China will increase sharply in the near future.
Results also indicated that Hong Kong had positive relations with Taiwan agricultural exports from1993 to 2001.The existing of border effect caused Taiwan exporting more volume to Hong Kong than the effect didn’t exist. It could be explained by that Hong Kong was the trading agent between Taiwan and China.
As far as Japan was concerned, it had positive and steady relations with Taiwan agricultural exports since 1992 because of colony. Although the positive relations has been decreasing gradually in recent years, and the impacts of the border effect existed causing exporting more to Japan than the effect didn’t exist had decreased from 1992 to 2008, Japan still highly relied on Taiwan’s agric-products in general.
Subjects
agricultural exports
gravity model
border effect
no haste
be patient
colony
SDGs
Type
thesis
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