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Technology, factor endowments, and China's agricultural foreign trade: a neoclassical approach

Xilin Li (School of Agricultural Economics and Rural Development, Renmin University of China, Beijing, China and Department of Economic and Technological Change (ZEF B), Center for Development Research, University of Bonn, Bonn, Germany)

China Agricultural Economic Review

ISSN: 1756-137X

Article publication date: 27 January 2012

3907

Abstract

Purpose

The purpose of this paper is to explain the determination of China's agricultural foreign trade pattern since the World Trade Organization (WTO) accession.

Design/methodology/approach

The neoclassical trade theory indicates that differences in both technology levels and factor endowments can explain the international trade pattern. In terms of a neoclassical framework based on the restricted profit function, this paper employs the province‐level panel data to investigate whether China's agricultural foreign trade pattern is consistent with the neoclassical explanation.

Findings

The findings indicate that China's agricultural foreign trade pattern is evidently characterized by regional specific features. In the eastern region, agricultural foreign trade pattern is jointly determined by differences in technology levels and factor endowments. Agricultural foreign trade patterns are driven in the central and western regions by land and capital endowments, respectively. The findings also imply that the utilization of comparative advantage in China's agriculture needs to be exploited further.

Originality/value

As far as the author knows, this paper is the first to apply the neoclassical framework based on the restricted profit function and employ the province‐level panel data to investigate the determination of China's agricultural foreign trade pattern.

Keywords

Citation

Li, X. (2012), "Technology, factor endowments, and China's agricultural foreign trade: a neoclassical approach", China Agricultural Economic Review, Vol. 4 No. 1, pp. 105-123. https://doi.org/10.1108/17561371211196801

Publisher

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Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited

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