Catalyst or barrier? Impact of cereal trade on urbanization

Abstract

Clarifying the impact of cereal trade on urbanization is crucial for enhancing effective food security policies and promoting sustainable urban development. However, the heterogeneous impact of the cereal trade on urbanization remains underexplored. This study applies international trade theory to explore the causal effects and supplements panel data on 216 economies from 1990 to 2018 using two-stage least squares regression (2SLS). The results show that both cereal exports and imports significantly promote urbanization, with the magnitude of imports being higher than that of exports. Furthermore, global cereal trade promotes urbanization in both emerging and developed economies. The findings provide insights for policymakers on how to leverage adjustments in cereal trade policies to enhance urbanization, particularly in economies striving to balance food security with urban development.