Trade duration of Chinese shrimp exports

Abstract

Seafood is among the most highly traded food commodities, and one will expect trade patterns to be highly dynamic. In this paper, trade duration is investigated for Chinese shrimp exports using firm-level data for the period 2007–2015. In line with the results from the general literature, most trade relationships in the Chinese exports of shrimp are short-lived and influenced by the market as well as product characteristics. The results indicate that it is also important to account for firm-specific characteristics, large firms have more stable trade relationships. It is also worthwhile to note that the firms located within Special Economic Zones (SEZs) have a shorter trade duration than those outside of SEZs, indicating these firms’ opportunistic market behavior.

Keywords:

• Trade performance
• shrimp
• duration analysis
• special economic zones
• Chinese customs data

Notes

1 Xie and Zhang (2017), Wang et al. (2019), and Zhang and Tveteras (2019) investigate trade duration for seafood at the country-to-country level.

2 It is also of interest to note that shorter duration also increase cost in retailing (Sogn-Grundvåg et al., 2019).

3 It is of interest to note that the interaction between size depended pricing and quality is the most likely reason for the failure of the shrimp futures market in Minneapolis (Martinez-Garmendia & Anderson, 1999).

4 While it has not been studied for shrimp, it has been well documented for salmon that disease crisis like the Chilean ISA crises increase prices and creates opportunities for unaffected producers (Asche, Oglend, & Kleppe, 2017; Asche, Cojocaru, & Sikveland, 2018; Dresdner et al., 2019; Quezada & Dresdner, 2017). It is also a likely cause for the high degree of price volatility (Asche, Misund & Oglend, 2019; Asche et al., 2015; Dahl & Oglend, 2014).

5 The category of fresh shrimps and prawns includes live, fresh, dried, smoked, and salted shrimps and prawns. Shrimp and prawns for cultivation, which account for only 0.04% of total shrimp exports for the period 2007–2015, are excluded from this study.

6 The nature of our dataset raises the left-censoring issue. That is, trade relationships that are active in the first year of the sample period (2007 in this study) could have begun in or before 2007. We ran regressions both with and without those left-censored observations and found no qualitative change of the result. Therefore, only the results of the whole sample are reported in section 4.

7 While this is a feature that has not received much attention for shrimp, it has received significant attention for salmon. In particular, Asche, Roll and Tveteras (2007) show that supply chains for salmon is more efficient than for wild cod. Kvaløy and Tveteras (2008) and Tveteras and Asche (2008) discuss how it is possible to exploit economies of scale in salmon supply chains. The importance of freshness follows from the fact that fresh or relatively unprocessed products are more valuable (Asche & Smith, 2018; Roheim et al., 2007), highlighting the fact that better control with the production process also allows more efficient supply chains and higher paying markets to be targeted (Anderson, 2002; Anderson et al., 2019).