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Article
Publication date: 9 July 2024

Qianqian Zhang, Faqin Lin, Xiuqing Wang and Xian Xin

The purpose of this paper is to present an oligopolistic version of the cobweb model that departs from the strict assumptions of perfect competition in the traditional cobweb…

146

Abstract

Purpose

The purpose of this paper is to present an oligopolistic version of the cobweb model that departs from the strict assumptions of perfect competition in the traditional cobweb model.

Design/methodology/approach

Introducing a model where n identical producers engage in Cournot competition, with output decisions influencing market prices. The paper retains the original assumptions of naive expectations and a linear model where price expectations of Cournot competitors are made simultaneously with production decisions. The investigation focuses on the model's behavior as the number of producers decreases or industry concentration increases. The authors also show empirical evidence when drawing the data from the pig sector in China and the USA.

Findings

The findings indicate that the cobweb model undergoes a transition from divergent to continuous and even convergent as the number of producers decreases or industry concentration increases. The incorporation of costs related to entry and exit from the market contributes to achieving a more stable equilibrium state.

Originality/value

The cobweb model has been primarily studied in an idealized market structure of perfect competition, and the assumptions that they share are not obviously appropriate to many agriculture markets. This study presents an alternative version of the cobweb model in an oligopolistic market that relaxes the strict assumptions of perfect competition. The authors show the dynamics of reduced competitor numbers or increased industry concentration on the convergence of the cobweb model based on subtle variations in parameters.

Details

China Agricultural Economic Review, vol. 16 no. 4
Type: Research Article
ISSN: 1756-137X

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Article
Publication date: 5 January 2023

Fan Feng, Ningyuan Jia and Faqin Lin

Considering the importance of Russia and Ukraine in agriculture, the authors quantify the potential impact of the Russia–Ukraine conflict on food output, trade, prices and food…

1424

Abstract

Purpose

Considering the importance of Russia and Ukraine in agriculture, the authors quantify the potential impact of the Russia–Ukraine conflict on food output, trade, prices and food security for the world.

Design/methodology/approach

The authors mainly use the quantitative and structural multi-country and multi-sector general equilibrium trade model to analyze the potential impacts of the conflict on the global food trade pattern and security.

Findings

First, the authors found that the conflict would lead to soaring agricultural prices, decreasing trade volume and severe food insecurity especially for countries that rely heavily on grain imports from Ukraine and Russia, such as Egypt and Turkey. Second, major production countries such as the United States and Canada may even benefit from the conflict. Third, restrictions on upstream energy and fertilizer will amplify the negative effects of food insecurity.

Originality/value

This study analyzed the effect of Russia–Ukraine conflict on global food security based on sector linkages and the quantitative general equilibrium trade framework. With a clearer demonstration of the influence about the inherent mechanism based on fewer parameters compared with traditional Global Trade Analysis Project (GTAP) models, the authors showed integrated impacts of the conflict on food output, trade, prices and welfare across sectors and countries.

Details

China Agricultural Economic Review, vol. 15 no. 2
Type: Research Article
ISSN: 1756-137X

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Article
Publication date: 5 October 2015

Faqin Lin, Hsiao Chink Tang and Lin Wang

The purpose of this paper is to quantify how the People’s Republic of China’s (PRC) export volume affects the anti-dumping (AD) petitions filed by its major trading partners…

1409

Abstract

Purpose

The purpose of this paper is to quantify how the People’s Republic of China’s (PRC) export volume affects the anti-dumping (AD) petitions filed by its major trading partners against the country.

Design/methodology/approach

Focusing on the AD petitions at the Harmonized System (HS) Code eight-digit level and the PRC’s exports at the HS two-digit level to its major trade partners during the financial crisis, we construct three instrument variables for export volume within HS two-digit level variation in the variables. These instruments – documents required, time taken and container charges incurred for goods traded across borders – represent trade costs obtained from World Bank’s Doing Business Project. We find rising exports from the PRC lead to rising AD petitions against the country.

Findings

Instrumental variable estimates indicate that a 1 percentage point rise in the PRC’s export volume raises the number of AD petitions against the country by about 0.25 percentage points, and the probability of receiving AD petitions by 3.5 per cent. These estimates are about 10 times larger than that found in ordinary least square regressions.

Originality/value

Their quantitative significance underlines why it is important to consider the issue of export endogeneity in the estimation, and that the failure of the current trade statistics to account for the true value-added of traded goods particularly disadvantaged the PRC given its position as the factory of the world.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 8 no. 3
Type: Research Article
ISSN: 1754-4408

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Article
Publication date: 8 February 2011

Faqin Lin

The purpose of this paper is to examine whether there are any systematic relationships between the characteristics of each study about immigrants' pro‐trade impacts and its…

1598

Abstract

Purpose

The purpose of this paper is to examine whether there are any systematic relationships between the characteristics of each study about immigrants' pro‐trade impacts and its results.

Design/methodology/approach

A meta‐analysis of 24 papers and 184 estimates that study the trade‐creating network effects of immigrants is employed.

Findings

The paper finds that, first, immigrant's trade‐creating effects are higher for English‐speaking countries than for non‐English‐speaking countries; second, immigrant's trade‐creating effects are higher for disaggregated data than for aggregated data; third, the trade‐creating effects seem declining over time. Besides, no evidence of publication bias has been found.

Research limitations/implications

This study relied heavily on case studies on developed countries.

Practical implications

Given strong evidence about the pro‐trade effects of immigrants and the unevenness of such effects, the world countries could reduce the cost and barriers for the movements of immigrants and thus help to increase international trade.

Originality/value

The paper is the first to use meta‐analysis to assess the pro‐trade effects of immigrants across different studies.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 4 no. 1
Type: Research Article
ISSN: 1754-4408

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