Information and communication infrastructure development and agro-food trade

Abstract

The purpose of this paper is to provide an adapted gravity trade model to measure the influence of communication infrastructure development on agro-food trade. The adapted gravity trade model presents associations of bilateral agro-food trade between OECD countries with traditional gravity equation variables and particularly with variables of the information and communication infrastructure development. Using the adapted gravity trade model we find a positive association between the information and communication infrastructure development and bilateral agro-food trade flows between OECD countries. This association is significantly stronger for agricultural than for food products. The improved information and communication infrastructure development improves information and reduces trade transaction costs.