Political and economic determinants of export restrictions in the agricultural and food sector

Abstract

Utilizing a rich export restriction database that covers 527 agricultural products at the six-digit Harmonized System (HS) code level in 168 countries from 2005 to 2015, this article investigates the political and economic determinants of countries’ export restriction decisions. Empirical analysis shows that a one standard deviation increase in a commodity's market power increases the probability of an export restriction on that commodity by 5.5%, and a one standard deviation increase in a country's number of Regional Trade Agreement (RTA) partners decreases the probability of an export restriction by 6.0%. There is also evidence that higher market power of the downstream sector, which purchases inputs from the upstream sector, leads to a higher probability of export restrictions in the upstream sector. Macroeconomic variables, including urbanization rate, agricultural land per capita, and weather variables, are also important determinants of export restrictions. This article highlights the potential role of RTAs and competitive market structure in both the sector of interest and its downstream sector in disciplining export restrictions.