1. Equivalence of Organic Standards as a Signal of Affinity: A Gravity Model of Italian Agricultural Trade.
- Author
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Canavari, Maurizio and Cantore, Nicola
- Subjects
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AGRICULTURAL industries , *INTERNATIONAL trade , *CERTIFICATION , *TRANSACTION costs - Abstract
The literature about gravity models stresses that bilateral trade flows among countries are influenced by size of the economy and transaction costs. If compared with the previous literature our article shows a twofold novelty. First, to the best of our knowledge it is the first attempt to analyze the bilateral trade of agricultural goods for Italy by a cross-country and panel analysis in a gravity model, and second, it provides an original specification for transaction costs. In particular, we assume that the level of organic certification standards equivalence between Italy and extra-European countries could represent a good “proxy” for affinity in bilateral trading relationships concerning the agricultural sector both for organic and nonorganic products. Interestingly we find that the absence of specific import equivalence rules between Italy and other extra-European countries decreases the level of bilateral trade. The policy agenda about equivalence of the organic agricultural standards should be tackled in the context of a more complex agenda concerning the affinity of political, cultural, and social practices among different regions in the agricultural sector. [ABSTRACT FROM AUTHOR]
- Published
- 2010
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