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In the long view, recent grain price volatility is not anomalous. Wheat, rice, and maize are highly substitutable in the global market for calories, and when aggregate stocks decline to minimal feasible levels, prices become highly sensitive to small shocks, consistent with storage models. In this decade, stocks have declined due to high income growth and biofuels mandates. Recently, shocks including the Australian drought and biofuels demand boosts due to the oil price spike were exacerbated by a sequence of trade restrictions by key exporters beginning in the thin global rice market in the fall of 2007, which turned market anxiety into panic. To protect vulnerable consumers, countries intervened in storage markets and, if they were exporters, to limit trade access. Recognizing these realities, vulnerable countries are building strategic reserves. The associated expense and negative incentive effects can be controlled if reserves have quantitative targets related to the consumption needs of the most vulnerable, with distribution to the latter only in severe emergencies. More-ambitious plans manipulate world prices via buffer stocks or naked short speculation to keep prices consistent with fundamentals. Past interventions of either kind have been expensive, ineffective, and generally short-lived. Further, there is no significant evidence that prices do not reflect fundamentals, including export market access.

Access to Markets --- Commodity price --- Commodity prices --- Cost increases --- Domestic market --- Export market --- Free market --- International Economics & Trade --- International trade --- Macroeconomics and Economic Growth --- Market access --- Market price --- Market prices --- Market volatility --- Marketing --- Markets and Market Access --- Petroleum prices --- Price changes --- Price fluctuations --- Price increases --- Price risk --- Price volatility --- Stocks --- Volatility

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This paper investigates the extent of China's export boom in machinery and analyzes trade in components and finished machinery between China and Southeast Asia. China has increased its world market share in machinery exports. The median relative unit value of its finished machinery exports has also risen. Yet the author finds no evidence that China's expansion in the world machinery market has squeezed the market shares of Southeast Asian machinery exports. Instead, components made by Southeast Asian countries are increasing in unit value and gaining market share in China.

Competitiveness --- Debt Markets --- Economic Theory and Research --- Export market --- Finance and Financial Sector Development --- Finished products --- Free Trade --- General Manufacturing --- Home market --- Home markets --- Industry --- International Economics & Trade --- Macroeconomics and Economic Growth --- Market share --- Markets and Market Access --- Supplier --- Suppliers --- Third markets --- World market

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This paper examines firm entry and survival in exporting, and in products and markets not previously served by any domestic exporters. The authors use data on the nontraditional agriculture sector in Peru, which grew seven-fold from 1994 to 2007. They find tremendous firm entry and exit in the export sector, with exits more likely after one year and among firms that start small. There is also significant entry and exit in new markets. In contrast, such trial and error in new products is rare. New products are typically discovered by large experienced exporters and there is increased entry after products are discovered. The results imply that high sunk costs of entry are of concern for product discovery, especially for products that are not consumed domestically. In contrast, the tremendous entry and exit in exporting and in new markets suggests that initial sunk costs are relatively low. The authors develop a model that explains how entrepreneurs decide to export and to develop new export products and markets when there are sunk costs of discovery and uncertainty about idiosyncratic costs. The model explains many features of the data.

Access to Markets --- Brand --- Brand names --- Competitiveness --- Debt Markets --- Direct market --- Domestic market --- Domestic markets --- Economic Theory & Research --- Export market --- Export markets --- Finance and Financial Sector Development --- Home market --- International Economics and Trade --- International markets --- International trade --- Macroeconomics and Economic Growth --- Market access --- Market conditions --- Market development --- Market information --- Market share --- Marketing --- Markets and Market Access --- Merchandise --- Microfinance --- Product market --- Sales

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• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper examines firm entry and survival in exporting, and in products and markets not previously served by any domestic exporters. The authors use data on the nontraditional agriculture sector in Peru, which grew seven-fold from 1994 to 2007. They find tremendous firm entry and exit in the export sector, with exits more likely after one year and among firms that start small. There is also significant entry and exit in new markets. In contrast, such trial and error in new products is rare. New products are typically discovered by large experienced exporters and there is increased entry after products are discovered. The results imply that high sunk costs of entry are of concern for product discovery, especially for products that are not consumed domestically. In contrast, the tremendous entry and exit in exporting and in new markets suggests that initial sunk costs are relatively low. The authors develop a model that explains how entrepreneurs decide to export and to develop new export products and markets when there are sunk costs of discovery and uncertainty about idiosyncratic costs. The model explains many features of the data.

Access to Markets --- Brand --- Brand names --- Competitiveness --- Debt Markets --- Direct market --- Domestic market --- Domestic markets --- Economic Theory & Research --- Export market --- Export markets --- Finance and Financial Sector Development --- Home market --- International Economics and Trade --- International markets --- International trade --- Macroeconomics and Economic Growth --- Market access --- Market conditions --- Market development --- Market information --- Market share --- Marketing --- Markets and Market Access --- Merchandise --- Microfinance --- Product market --- Sales

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

In the long view, recent grain price volatility is not anomalous. Wheat, rice, and maize are highly substitutable in the global market for calories, and when aggregate stocks decline to minimal feasible levels, prices become highly sensitive to small shocks, consistent with storage models. In this decade, stocks have declined due to high income growth and biofuels mandates. Recently, shocks including the Australian drought and biofuels demand boosts due to the oil price spike were exacerbated by a sequence of trade restrictions by key exporters beginning in the thin global rice market in the fall of 2007, which turned market anxiety into panic. To protect vulnerable consumers, countries intervened in storage markets and, if they were exporters, to limit trade access. Recognizing these realities, vulnerable countries are building strategic reserves. The associated expense and negative incentive effects can be controlled if reserves have quantitative targets related to the consumption needs of the most vulnerable, with distribution to the latter only in severe emergencies. More-ambitious plans manipulate world prices via buffer stocks or naked short speculation to keep prices consistent with fundamentals. Past interventions of either kind have been expensive, ineffective, and generally short-lived. Further, there is no significant evidence that prices do not reflect fundamentals, including export market access.

Access to Markets --- Commodity price --- Commodity prices --- Cost increases --- Domestic market --- Export market --- Free market --- International Economics & Trade --- International trade --- Macroeconomics and Economic Growth --- Market access --- Market price --- Market prices --- Market volatility --- Marketing --- Markets and Market Access --- Petroleum prices --- Price changes --- Price fluctuations --- Price increases --- Price risk --- Price volatility --- Stocks --- Volatility