Empirical analysis of US bilateral corn trade: Evidence from Japan, Mexico, China, South Korea, and the European Union

Figures & data

Figure 1. Scatter Plot of U.S. corn exports to its trading partners (1000 metric tons), (1967–2016).

Source: USDA, FAS (2018)

Figure 2. Trends in Corn Export by US, Brazil, Ukraine, and Argentina (1000 MT).

Source: USDA, ERS (2020)

Table 1. Summary Statistics

Variable	Obs.	Mean	Std. Dev.	Min	Max
United States
Corn export	50	5,058,505	3,182,206	209,694	1.34e+07
Export price	50	111.949	66.849	16.223	297.411
Ethanal production	50	1222.037	1829.407	0	5275
Real effective exchange rate	50	82.285	50.413	0	147.707
Technology	50	120.024	28.552	71.9	174.6
Mexico
Corn import	50	679,941.1	774,477.6	868	2,635,017
Import price	50	0.558	12.338	−18.221	15.124
GDP	50	1.530	3.230	−7.832	6.996
Pork production	50	1.52e+07	2,337,991	9,537,000	1.94e+07
NAFTA	50	0.46	0.503	0	1
Japan
Corn import	50	1,544,422	868,380.6	91,503	3,828,567
Import price	50	22.685	2.149	16.401	26.229
GDP	50	7.418	4.724	−8.161	16.050
Pork production	50	9,454,009	1,515,066	5,621,000	1.19e+07
WTO	50	0.44	0.501	0	1
China
Corn import	50	117,739.1	264,694.6	0	1,309,720
Import price	50	6.761	3.396	1.808	10.699
Pork production	50	3.61e+08	8.89e+07	1.76e+08	4.82e+08
GDP	50	2.547	3.187	−5.405	12.507
Population	50	1.256	0.685	0.479	2.762
WTO	50	0.32	0.471	0	1
South Korea
Corn import	50	450,985.8	475,668.5	3131.0	2,147,106
Import price	50	30.193	6.078	15.605	40.019
GDP	50	6.239	3.852	−6.151	12.815
Chicken production	50	77,824.78	44,491.30	18,814.0	170,147
WTO	50	0.440	0.501	0	1.00
EU
Corn import	50	653,203.4	849,033.8	571.00	2,976,030
Import price	50	−0.924	0.704	−2.076	0.722
GDP	50	16,730.97	11,897.31	1546.80	38,185.62
Cattle production	50	97,721,422	14,128,290	77,948,189	1.16e+08
population	50	4.77e+08	21,269,818	4.34e+08	4.77e+08

Source: USDA, FAO, EIA, and World Bank, Software: Stata 14.2

Table 2. Unit Roots test (Intercept Only)

	ADF-Intercept Only	PP-Intercept Only
Variable	T-Stat Levels	T-Statistic Levels	Order of Integration
United States
Corn export	−2.919**	−4.223***	I(0)
Export price	−2.604*	−3.276**	I(0)
Technology	−0.790	−1.812	I(1)
Exchange rates	−1.680	−1.680	I(1)
Ethanol production	−0.818	−0.807	I(1)
Mexico
Corn import	−3.121**	−3.130**	I(0)
Import Price	−0.690	−0.437	I(1)
GDP	−5.657***	−5.661***	I(0)
Pork production	−2.972**	−2.826**	I(0)
Japan
Corn import	−3.312**	−4.868***	I(0)
Import price	−3.712***	−3.911***	I(0)
GDP	−6.726***	−5.282***	I(0)
Pork production	−3.959***	−2.707*	I(0)
China
Corn import	−4.047***	−3.779***	I(0)
Import price	−0.885	−0.916	I(1)
GDP	−4.582***	−4.453***	I(0)
Pork production	−1.964	−0.421***	I(0)
Population	−3.070**	−1.663	I(0)
South Korea
Corn import	−3.061**	−3.038**	I(0)
Import price	−2.503	−3.280**	I(0)
Chicken production	−0.272	−0.123	I(1)
GDP	−3.313**	−3.280**	I(0)
EU
Corn import	−0.896	−2.102	I(1)
Import price	−3.282**	−2.865*	I(0)
GDP	−2.521	−2.662*	I(0)
Cattle production	−0.399	0.059	I(1)

***, **, * indicates 1%, 5%, and 10% level of significance respectively.

USDA, FAO, EIA, and World Bank, Software: EViews 10 SV

Table 3. Unit Roots test (Intercept and Trend)

	ADF-Intercept and Trend	PP-Intercept and Trend
Variable	T-Stat	T-Statistic	Order of
	Levels	Levels	Integration
United States
Corn export	−4.027**	−3.953**	I(0)
Export price	−2.699	−2.730	I(1)
Technology	−7.459***	− 8.705***	I(0)
Exchange rates	−2.420	−1.657	I(1)
Ethanol production	−1.323	−0.893	I(1)
Mexico
Corn import	−4.577***	−4.499**	I(0)
Import Price	−2.152	−1.846	I(1)
GDP	−5.832***	−5.804***	I(0)
Pork production	−2.207	−2.188	I(1)
Japan
Corn import	−3.031	−3.117	I(1)
Import price	−3.674**	−2.846	I(0)
GDP	−6.939***	−5.212***	I(0)
Pork production	−2.772	−1.363	I(1)
China
Corn import	−3.341*	−3.160	I(0)
Import price	−0.670	−1.085	I(1)
GDP	−5.445***	−5.420***	I(0)
Pork production	−1.979	−1.251	I(1)
Population	−4.194***	−1.763	I(0)
South Korea
Corn import	−3.511**	−3.448*	I(0)
Import price	−2.435	−2.184	I(1)
Chicken production	−2.671	−2.807	I(1)
GDP	−1.121	−1.162	I(1)
EU
Corn import	−2.618	−3.705**	I(0)
Import price	−3.356*	−2.787	I(0)
GDP	−1.946	−1.238	I(1)
Cattle production	−2.336	−2.251	I(1)

***, **, * indicates 1%, 5%, and 10% level of significance respectively.

USDA, FAO, EIA, and World Bank, Software: EViews 10 SV

Figure 3. Plot of Variables in Levels (1967–2016).

USDA, FAO, EIA, and World Bank, Software: EViews SV 10

Figure 4. Plot of Variables in Levels (1967–2016).

USDA, FAO, EIA, and World Bank, Software: EViews SV 10

Figure 5. Trends in US Corn Exports to Major Importers (1000 metric tons).

USDA, FAS (2018). Software: Excel

Table 4. Test of Long Run relationship

	US	Mexico	Japan	China	South Korea	EU
Lower Bound (95%)	3.160	17.311	3.519	18.293	14.439	20.348
Upper Bound (95%)	4.401	17.311	4.698	18.293	14.439	20.348
F-Statistic	10.487	26.444	3.668	28.540	16.697	23.231
Wald-Statistic	52.437	26.444	14.673	28.540	16.697	24.256

Source: USDA, FAO, EIA, and World Bank, Software: Microfit Version 5.0

Table 5. US Corn Export Model: ARDL (Long-Run) Estimates

Dep Var: Corn Export
Variable	Coef.	Std Error	T-Ratio	P-Value
Corn export(−1)	0.351	0.110	3.186	0.003***
Export price	1.230	0.140	8.791	0.000***
Export price(−1)	−0.657	0.169	−3.894	0.000***
Real effective exchange rate	−0.815	0.346	−2.353	0.025**
Real effective exchange rate(−1)	0.979	0.477	2.050	0.049**
Real effective exchange rate(−2)	−1.015	0.332	−3.059	0.004***
Technology	0.772	0.226	3.412	0.002***
Technology(−1)	0.806	0.228	3.538	0.001***
Ethanol production	−0.154	0.032	−4.778	0.000***
Ethanol production(−1)	0.124	0.040	3.094	0.004***
Ethanol production(−2)	−0.014	0.039	−0.359	0.722
Ethanol production(−3)	0.060	0.041	1.456	0.155
Ethanol production(−4)	−0.114	0.031	−3.647	0.001***
Constant	4.250	1.789	2.376	0.024**
R-Squared	0.970	F-Stat	80.099	0.000***
DW-statistic	1.724
Serial Correlation LM Test	2.115	0.347
Heteroskedasticity Test (BP)	13.289	0.504

***, **, * indicates 1%, 5%, and 10% level of significance respectively.

USDA, FAO, EIA, and World Bank, Software: Microfit Version 5.0

Table 6. US Corn Export: Error Correction Model (Short-Run)

Dep Var: Corn Export
Variable	Coef.	Std Error	T-Ratio	P-Value
Dexport price	1.230	0.140	8.791	0.000***
Dreal effective exchange rate	−0.815	0.346	−2.353	0.024**
Dreal effective exchange rate (−1)	1.015	0.332	3.059	0.004***
Dtechnology	0.772	0.226	3.412	0.002***
Dethanol production	−0.154	0.032	−4.778	0.000***
Dethanol production (−1)	0.068	0.030	2.320	0.026**
Dethanol production(−2)	0.054	0.031	1.742	0.090*
Dethanol production(−3)	0.114	0.031	3.647	0.001***
Error correction term (−1)	−0.649	0.110	−5.887	0.000***
R-Squared	0.861	F-Stat	22.092	0.000***
DW-Statistic	1.724

***, **, * indicates 1%, 5%, and 10% level of significance respectively.

d indicates first difference.

USDA, FAO, EIA, and World Bank, Software: Microfit Version 5.0

Table 7. Corn Import Model: ARDL Estimates

Dep Var: corn import
Variable	Mexico	Japan	China	South	EU
				Korea
Import price	−0.289*	0.191***	−1.303***	0.286***	−0.418*
	(0.145)	(0.031)	(0.444)	(0.088)	(0.245)
Import price (−1)	0.273*	−0.109***		−0.203**
	(0.142)	(0.035)		(0.090)
Pig production	4.837***	1.480***	35.357***
	(1.361)	(0.370)	(10.732)
Chicken production				3.236**
				(1.460)
Chicken production (−1)				−2.845**
				(1.320)
Cattle production					8.979**
					(3.540)
GDP	0.007	0.005	−0.106	0.013	0.216**
	(0.050)	(0.008)	(0.242)	(0.031)	(0.108)
GDP (−1)	−0.007*	−0.013*			−0.205**
	(0.050)	(0.007)			(0.105)
Population			8.780**
			(3.686)
NAFTA	1.432***
	(0.495)
WTO		0.343***	4.281**	1.094	0.108
		(0.103)	(2.090)	(0.705)	(0.825)
WTO (−1)				−1.322*
				(0.689)
Lagged Import (−1)	0.373***	0.418***	0.300**	0.443***	0.356*
	(0.121)	(0.135)	(0.131)	(0.131)	(0.145)
CONSTANT	−72.427***	−17.545***	−693.93***	−0.129	−157.814**
	(21.552)	(4.889)	(213.027)	(0.131)	(64.357)
R-Squared	0.814	0.948	0.441	0.818	0.779
F-Stat	25.58***	106.818***	5.516***	22.436***	24.667***
DW-Statistic	2.161	1.901	1.702	2.129	1.982

***, **, * indicates 1%, 5%, and 10% level of significance respectively.

Values in brackets are robust standard errors.

USDA, FAO, EIA, and World Bank, Software: EViews 10

Table 8. Error Correction Model (Short-Run) Estimates

Dep Var: corn import
Variable	Mexico	Japan	China	South Korea	EU
Dimport price	−0.289**	0.191***		0.286***
	(0.088)	0.025		(0.069)
Dchicken production				3.236***
				(1.073)
DGDP	0.007	0.005			0.216**
	(0.030)	(0.006)			(0.011)
DWTO				1.055*
				(0.622)
Error correction term (−1)	−0.627***	−0.582***	−0.700***	−0.557***	−0.644***
	(0.098)	(0.106)	(0.112)	(0.109)	(0.127)
R-Squared	0.486	0.642	0.446	0.466	0.447
DW-Statistic	2.161	1.901	1.702	2.129	1.982

***, **, * indicates 1%, 5%, and 10% level of significance respectively.

D is differenced operator. USDA, FAO, EIA, and World Bank, Software: EViews 10

Table 9. Results of Diagnostic tests

Test	${\chi }^2$	Probability
Mexico
Breusch-Godfrey Serial Correlation LM test	0.311	0.386
Heteroskedasticity-Breusch-Pagan-Godfrey	0.110	0.105
Ramsey RESET test (log likelihood ratio)	2.943	0.862
Japan
Breusch-Godfrey Serial Correlation LM test	0.591	0.655
Heteroskedasticity-Breusch-Pagan-Godfrey	0.694	0.733
Ramsey RESET test (log likelihood ratio)	2.127	0.145
China
Breusch-Godfrey Serial Correlation LM test	0.362	0.438
Heteroskedasticity-Breusch-Pagan-Godfrey	0.137	0.136
Ramsey RESET test (log likelihood ratio)	0.305	0.581
South Korea
Breusch-Godfrey Serial Correlation LM test	0.607	0.738
Heteroskedasticity-White	39.074	0.292
Ramsey RESET test (log likelihood ratio)	0.077	0.781
EU
Breusch-Godfrey Serial Correlation LM test	0.401	0.467
Heteroskedasticity-Breusch-Pagan-Godfrey	0.956	0.250
Ramsey RESET test (log likelihood ratio)	0.910	0.340

USDA, FAO, EIA, and World Bank, Software: EViews 10

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