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Geography Matters: International Trade Patterns and the Indirect Land Use Effects of Biofuels
Author(s) -
Villoria Nelson B.,
Hertel Thomas W.
Publication year - 2011
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aar025
Subject(s) - economics , null hypothesis , production (economics) , biofuel , competition (biology) , economic geography , international trade , international economics , econometrics , ecology , microeconomics , biology
This article investigates the relationship between international trade patterns and the global distribution of coarse grain production responses to market developments in the United States. Our null hypothesis is that world markets are fully integrated, rendering the geographic persistence of bilateral trade flows irrelevant in the global production response to a change in U.S. prices. The alternative hypothesis allows price transmission to vary along with the intensity of competition among countries in specific markets. Using data from 1975 to 2002, we reject the null hypothesis. Our work has direct implications for the analysis of the global land use impacts of biofuel mandates.