Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/253271 
Year of Publication: 
2022
Citation: 
[Journal:] Journal of Asian Economics [ISSN:] 1049-0078 [Volume:] 80 [Article No.:] 101482 [Publisher:] Elsevier [Place:] Amsterdam [Year:] 2022
Publisher: 
Elsevier, Amsterdam
Abstract: 
Several governments worldwide aim at fostering agricultural productivity growth by providing investment support. However, the policy's effect on trade for middle- and low-income countries has not been analyzed so far. This paper analyzes the impact of agricultural policies (credit subsidies and tariffs) on agricultural trade flows by modifying a Melitz-type structural gravity model for a small and open economy. According to the theory, trade flows are expected to increase with credit subsidies and decrease with partners' applied tariff rates. We analyze bilateral agricultural trade flows between Kyrgyzstan and its 69 trading partners from 2007 to 2018 to test our theoretical findings. Applying the Poisson pseudo maximum likelihood estimator, we find that credit subsidies effectively increase international trade flows while applied tariffs imposed on agricultural products reduce Kyrgyzstan's export substantially. These results can be applied to similar economies with publicly available data where small budgetary efforts drive trade expansion.
Subjects: 
gravity model
general equilibrium effects
tariffs
subsidies
JEL: 
F10
F13
F14
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Published Version

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