Price Effects of Preferential Market Access: Caribbean Basin Initiative and the Apparel Sector

Preferential trade arrangements should be evaluated by theireffect on prices rather than by their effect on the total valueof trade. This point is emphasized in the theoretical literaturebut rarely implemented empirically. This article analyzes theU.S. Caribbean Basin Initiative’s (CBI’s) impacton the prices received by eligible apparel exporters. The CBI’sapparel preferences are the most important and heavily usedunilateral preferences because of high trade barriers imposedon exports from the rest of the world. A fixed-effects generalizedleast squares (GLS) estimation is used to isolate the effectsof other factors (such as quality, exchange rates, and transactioncosts) and to identify the effects of tariff preferences. CBIexporters capture only about two-thirds of their preferencemargin despite the high degree of competition among importers.This translates into a 9 percent increase in the relative pricesthey receive, with some variance across countries and years.Countries specializing in higher value items capture more ofthe preference margin, and the implementation of the North AmericanFree Trade Agreement (NAFTA) has a negative effect. RemovingMultifibre Arrangement quotas significantly lowers the benefitsof CBI preferences.     

Efficiency and total factor productivity of crop production at NUTS1 level in Turkey: Malmquist index approach

Fundamental components of the economy in developing countries are efficiency and productivity. These concepts prevail all around the world and many studies have been conducted on the issue. With the rapidly increasing population, productivity and efficiency of the agricultural sector have become even more important in order to meet the food needs of the population. In this study, NUTS (The Nomenclature of Territorial Units for Statistics) regions in Turkey were accepted as an decision making unit and the efficiency values of these regions, changes in the total factor productivity and technology were calculated for the 10-year period covering 1994–2003. Methods of Data Envelopment Analysis and Malmquist Productivity Index were used in order to measure the crop production of NUTS1 regions in Turkey. There has been a decrease in the technical efficiency and total factor productivity in the regions, excluding the Western Marmara, the Aegean, the Mediterranean and The Eastern Blacksea Region, within the 10 year period analyzed. The decrease reflected all over the country. The decrease was caused by the fact that the real price level remained the same; the real prices of the inputs increased despite the decreasing population economically active in the agricultural sector, and the difficulty experienced in integration of the latest technology to the agricultural sector. Regional differences in terms of productivity and efficiency is another striking finding.