Economic Performance, Trade Restrictiveness, and Efficiency |
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Authors: | J Christophe Bureau Nancy H Chau Rolf Färe Shawna Grosskopf |
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Institution: | Dept. d'Economie INRA, Thiverval Grignon, France; Cornell University, Ithaca, NY, USA; Oregon State University, Corvallis, USA; Oregon State University, Corvallis, USA;  |
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Abstract: | The paper addresses the question of whether trade restrictiveness impacts economic performance, via a trade restrictiveness index that is decomposable into a trade distortion and a domestic distortion component. The paper builds on the Anderson and Neary price index measure of trade distortion, in evaluating trade restrictiveness via a distance function approach. This is accomplished by adding a “dual” version to their trade restrictiveness price index, based on distance functions that scale output quantities. The authors compute the trade restrictiveness quantity index (TRQI) using a parametric frontier approach to model the production side of the economy, and a panel of information on the agricultural sector of a set of European Community countries. The results suggest that the use of TRQI makes a considerable difference to interpretations of the efficiency impact of agricultural trade policies in EC countries, as compared to policy‐oriented aggregates or result‐oriented measures of trade restrictiveness. |
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