The Impact of Exchange Rate Volatility on World Broiler Trade
Article first published online: 19 DEC 2013
© 2013 Wiley Periodicals, Inc.
Special Issue: Emerging Issues in Global Animal Product Trade
Volume 30, Issue 1, pages 46–55, Winter 2014
How to Cite
Davis, C. G., Muhammad, A., Karemera, D. and Harvey, D. (2014), The Impact of Exchange Rate Volatility on World Broiler Trade. Agribusiness, 30: 46–55. doi: 10.1002/agr.21366
- Issue published online: 10 JAN 2014
- Article first published online: 19 DEC 2013
Studies of how exchange rate volatility affects aggregate trade flows implicitly assume a uniform response across individual sectors. This is highly unlikely given that the responsiveness of trade to exchange rate fluctuations could depend on the biological, marketing, and economic factors specific to a commodity. Consequently, we focused solely on broilers for this analysis, which is a leading sector in global meat trade. Using a gravity model, we assessed how two measures of exchange rate volatility (short- and long-run) affect cross-partner broiler trade. Our results indicated that long-run exchange rate volatility has a negative and significant effect on broiler trade, albeit small when compared to the effects of population, regionalization, and sharing a common border; the short-run effect of exchange rate volatility was insignificant. Overall, results suggest that exchange rate volatility has little or no effect on bilateral broiler trade. [EconLit citations: C32, F14, Q17].