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Daniel H. Pick

Bio: Daniel H. Pick is an academic researcher from United States Department of Agriculture. The author has contributed to research in topics: Exchange rate & Trade barrier. The author has an hindex of 21, co-authored 58 publications receiving 1664 citations. Previous affiliations of Daniel H. Pick include University of California, Davis & Economic Research Service.


Papers
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Journal ArticleDOI
TL;DR: In this article, the economics of geographical indications (GIs) are assessed within a vertical product differentiation framework that is consistent with the competitive structure of agriculture, and the authors find that GIs can support a competitive provision of quality and lead to clear welfare gains, although they fall short of delivering the (constrained) first best.
Abstract: The economics of geographical indications (GIs) is assessed within a vertical product differentiation framework that is consistent with the competitive structure of agriculture. It is assumed that certification costs are needed for GIs to serve as (collective) credible quality certification devices, and production of high-quality product is endogenously determined. We find that GIs can support a competitive provision of quality and lead to clear welfare gains, although they fall short of delivering the (constrained) first best. The main beneficiaries are consumers. Producers may also accrue some benefit if production of the high-quality products draws on scarce factors that they own.

216 citations

Journal ArticleDOI
TL;DR: In this article, the authors test the Armington assumptions of homotheticity and separability with data from the international cotton and wheat markets and show that the empirical results reject the assumptions.
Abstract: The Armington trade model distinguishes commodities by country of origin, and import demand is determined in a separable two-step procedure. This framework has been applied to numerous international agricultural markets with the objective of modeling import demand. In addition, computable general equilibrium (CGE) models commonly employ the Armington formulation in the trade linkage equations. The purpose of this paper is to test the Armington assumptions of homotheticity and separability with data from the international cotton and wheat markets. Both parametric and nonparametric tests were performed, and the empirical results reject the Armington assumptions. This has important implications for international trade modeling and CGE modeling.

198 citations

Posted ContentDOI
TL;DR: In this paper, the welfare impact of labeling policies of agricultural commodities with speci6c characteristics was investigated using a model of vertical differentiation, and the effects on equilibrium and welfare levels were calculated.
Abstract: This study considers the welfare impact of labeling policies of agricultural commodities with speci6c characteristics. Using a model of vertical differentiation, the effects on equilibrium and welfare levels are calculated. The introduction of the regulation and the emergence of two differentiated competitive markets leaves consumers and high-quality producers better off, while low-quality producers are worse off. With high costs and low quality differences, the total welfare impact of the regulation can be negative. Findings show that when high-quality producers can exercise market power, the regulation could be more easily accepted by producers, but it would have a negative effect on consumers.

113 citations

Journal ArticleDOI
TL;DR: In this article, the determinants of foreign direct investment and its relationship to trade in the U.S. food industry were investigated, and the results confirmed small substitution between foreign sales and exports, and that the host country's protection policies affect the decision to invest abroad.
Abstract: This article investigates the determinants of foreign direct investment and its relationship to trade in the U.S. food industry. A multinational corporation maximizes profits by choosing between production at home, which is exported, and production in a host country. This introduces the possibility that foreign affiliate sales can substitute and/or complement exports. The empirical framework consists of a four-equations system with foreign affiliate sales, exports, affiliate employment, and FDI as endogenous variables. The results confirm small substitution between foreign sales and exports, and that the host country's protection policies affect the decision to invest abroad.

97 citations

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TL;DR: In this paper, the competitive structure of U.S. agricultural exports is examined using a model of exporter behavior based on pricing decisions across destination markets, revealing that market power is revealed in the adjustment patterns of export prices in response to exchange rate movements.
Abstract: The competitive structure of U.S. agricultural exports is examined using a model of exporter behavior based on pricing decisions across destination markets. Market power is revealed in the adjustment patterns of export prices in response to exchange rate movements. The results reject the hypothesis that the export pricing decisions by U.S. firms are consistent with price discrimination across destination markets for cotton, corn, and soybeans. The strongest evidence against the competitive market structure is obtained for international trade in wheat, where results indicate that the two largest importers (Soviet Union and PRC) may exert market power to obtain lower prices.

94 citations


Cited by
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TL;DR: In this article, the authors introduce the concept of ''search'' where a buyer wanting to get a better price, is forced to question sellers, and deal with various aspects of finding the necessary information.
Abstract: The author systematically examines one of the important issues of information — establishing the market price. He introduces the concept of «search» — where a buyer wanting to get a better price, is forced to question sellers. The article deals with various aspects of finding the necessary information.

3,790 citations

Journal ArticleDOI

832 citations

Journal ArticleDOI
TL;DR: A wide variety of often conflicting theories of, and empirical tests for, asymmetry coexist in this literature as discussed by the authors, and the existing literature is far from being unified or conclusive, and that it has often been largely method-driven, with little attention devoted to theoretical underpinnings and the plausible interpretation of results.
Abstract: Asymmetric price transmission has been the subject of considerable attention in agricultural economics. It is not only important because it may point to gaps in economic theory, but also because its presence is often considered for policy purposes to be evidence of market failure. In this paper we survey the literature on asymmetric price transmission. A wide variety of often conflicting theories of, and empirical tests for, asymmetry co-exist in this literature. We classify the different types and causes of asymmetric price transmission and describe the econometric techniques used to quantify it. We also briefly review the results of empirical applications. Outstanding methodological problems and suggestions for future research are discussed. Our main conclusion is that the existing literature is far from being unified or conclusive, and that it has often been largely method-driven, with little attention devoted to theoretical underpinnings and the plausible interpretation of results. Hence, much interesting theoretical and empirical work remains to be done.

817 citations

Journal ArticleDOI
TL;DR: In this paper, the authors use a new firm level data set that establishes the location, ownership, and activity of 650,000 multinational subsidiaries and find that most foreign direct investment (FDI) occurs between rich countries.
Abstract: We use a new firm level data set that establishes the location, ownership, and activity of 650,000 multinational subsidiaries—close to a comprehensive picture of global multinational activity. A number of patterns emerge from the data. Most foreign direct investment (FDI) occurs between rich countries. The share of vertical FDI (subsidiaries which provide inputs to their parent firms) is larger than commonly thought, even within developed countries. More than half of all vertical subsidiaries are only observable at the four-digit level because the inputs they are supplying are so proximate to their parent firms’ final good that they appear identical at the two-digit level. We call these proximate subsidiaries ‘intra-industry’ vertical FDI and find that their location and activity are significantly different to the inter-industry vertical FDI visible at the two-digit level. These subsidiaries are not readily explained by the comparative advantage considerations in traditional models, where firms locate their low skill production stages abroad in low skill countries to take advantage of factor cost differences. We find that overwhelmingly, multinationals tend to own the stages of production proximate to their final production giving rise to a class of high-skill intra-industry vertical FDI.

380 citations

Journal ArticleDOI
TL;DR: A review of J-curve related empirical papers can be found in this article, where a large number of studies have attempted to test the phenomenon using different techniques and different model specifications, and the results are at best ambiguous and deserve to be collected together for the future generation of researchers and graduate students.
Abstract: Due to lag structure, currency devaluation is said to worsen the trade balance first and improve it later resulting in a pattern that resemble the letter J, hence the J-Curve phenomenon. Since its introduction by Magee in 1973 (Brooking Papers on Economic Activity, 1, pp. 303–25), a large number of studies have attempted to test the phenomenon using different techniques and different model specifications. The results are at best ambiguous and deserve to be collected together for the future generation of researchers and graduate students. This paper fills such a vacuum in the literature by reviewing the J-Curve related empirical papers.

371 citations