Hostname: page-component-586b7cd67f-dlnhk Total loading time: 0 Render date: 2024-11-27T20:30:58.564Z Has data issue: false hasContentIssue false
  • English
  • Français

Goodwill and Export Promotion Dynamics

Published online by Cambridge University Press:  26 January 2015

Henry W. Kinnucan  and
Li Gong
Henry W. Kinnucan
Affiliation:
Depart-ment of Agricultural Economics and Rural Sociology, Auburn University, Auburn, Alabama
Li Gong
Affiliation:
Department of Agricultural Economics and Rural Sociology, Auburn University, Auburn, Alabama
Get access Rights & Permissions [Opens in a new window]

Abstract

Federal subsidies for nonprice export promotion of farm products have been criticized on the grounds that they merely substitute taxpayer dollars for private promotional expenditures. This “displacement hypothesis” is tested by estimating export demand and advertising-goodwill re-lations using time series data for 1975-2008. The displacement hypothesis receives some support in that three of the nine tests show an inverse relationship between industry and government expenditures. However, the remaining tests show no relationship. These results, coupled with the finding of Kinnucan and Cai (2011) that expenditures for export promotion may be too high when consumer impacts are taken into account, suggest it is time to let the Market Access and Foreign Market Development programs operated by the U.S. Department of Agriculture lapse.

Keywords

export promotionforeign market developmentinternational tradesubsidyD61F14Q11
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 46 , Issue 1 , February 2014 , pp. 73 - 88
Copyright
Copyright © Southern Agricultural Economics Association 2014

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ackerman, K.Z., and Smith, M.E.. Agricultural Export Programs: Background for 1990 Farm Legislation. Washington, DC: USDA, ERS, CED, 1990.Google Scholar
Adams, B.H., Davis, G.C., Jensen, K.L., and Jakus, RM.. “Priorities and Preferences in the Allocation of MPP Branded Funds to Agribusiness Firms.” American Journal of Agricultural Economics 79(1997):1319–1331.CrossRefGoogle Scholar
Andrews, D.W.K., and Stock, J.H.. Inference with Weak Instruments. Technical Working Paper 313. Cambridge, MA: National Bureau of Economic Research, 2005.CrossRefGoogle Scholar
Armbruster, W.J., and Nichols, J.P.. Commodity Promotion Policy. Washington, DC: U.S. Department of Agriculture, 2001.Google Scholar
Armington, P.S. “A Theory of Demand for Differentiated Products by Place of Production.” International Monetary Fund Staff Papers 26(1969): 159–178.CrossRefGoogle Scholar
Chambers, R.G., and Just, R.E.. “Effects of Exchange Rate Changes on US Agriculture: A Dynamic Analysis.” American Journal of Agricultural Economics 63(1981):32–46.CrossRefGoogle Scholar
Coburn, T. 2012. Treasure Map: The Market Access Program's Bounty of Waste, Loot and Spoils Plundered from Taxpayers. Internet site: www.coburn.senate.gov/public/index.cfm?a= Files.Serve&File_id=5c2568d4-ae96-40bc-b3d8-19e7a259f749 (Accessed June 21, 2013).Google Scholar
Coulibaly, N., and Brorsen, B.W.. “Explaining the Differences between Two Previous Meat Generic Advertising Studies.” Agribusiness 15(1999): 501–515.3.0.CO;2-M>CrossRefGoogle Scholar
Doganoglu, T, and Klapper, D.. “Goodwill and Dynamic Advertising Strategies.” Quantitative Marketing and Economics 4(2006):5–29.CrossRefGoogle Scholar
Dwyer, M.J. Evaluating the Effectiveness of the Market Promotion Program on U.S. High Value Agricultural Exports. Washington, DC: U.S. Department of Agriculture, Foreign Agricultural Service, Mimeo, 1994.Google Scholar
Feichtinger, G.R.F.H., and Sethi, S.P.. “Dynamic Optimal Control Models in Advertising: Recent Developments.” Management Science 40(1994): 195–226.CrossRefGoogle Scholar
Forker, O.D., and Ward, R.W.. Commodity Advertising: The Economics and Measurement of Generic Programs. New York, NY: Lexington Books, 1993.Google Scholar
Global Insight. A Cost Benefit Analysis of USDA's International Market Development Programs. Eddystone, PA: Mimeo, 2007.Google Scholar
Global Insight, I.H.S. A Cost-benefit Analysis of USDA's International Market Development Programs. Eddystone, PA: Mimeo, 2010.Google Scholar
Hansen, B. “Efficient Estimation and Testing of Cointegrating Vectors in the Presence of Deterministic Trends.” Journal of Econometrics 53(1992):87–121.CrossRefGoogle Scholar
Hill, R.C., Griffiths, W.E., and Lim, G.C.. Principles of Econometrics. 4th ed. Hoboken, NJ: John Wiley & Sons, Inc., 2011.Google Scholar
Ho, M.D., and Hanrahan, C.E.. 2010. Agricultural Export Programs: Background and Issues. CRS Report 41202. Congressional Research Service. April 19.Google Scholar
Jakus, P.M., Jensen, K.L., and Davis, G.C.. “Revenue Impacts of MPP Branded Funds: A Firm-level Analysis.” Agricultural and Resource Economics Review 32(2003): 184–197.CrossRefGoogle Scholar
Keuzenkamp, H.A., and Barten, A.P.. “Rejection without Falsification: On the History of Testing the Homogeneity Condition in the Theory of Consumer Demand.” Journal of Econometrics 67(1995): 101–127.CrossRefGoogle Scholar
Kinnucan, H.W., and Cai, H.. “A Benefit-cost Analysis of U.S. Agricultural Trade Promotion.” American Journal of Agricultural Economics 92(2011):194–208.CrossRefGoogle Scholar
Kinnucan, H.W., and Myrland, Ø. “A Note on Measuring Returns to Nonprice Export Promotion.” Agribusiness 17(2001):423–433.CrossRefGoogle Scholar
Kinnucan, H.W., Xiao, H., Hsia, C.-J., and Jackson, J.D.. “Effects of Health Information and Generic Advertising on U.S. Meat Demand.” American Journal of Agricultural Economics 79(1997): 13–23.CrossRefGoogle Scholar
Love, H.A., Porras, J.J., and Shumway, CR.. “Measuring the Effectiveness of Non-price Export Promotion Using a Supply-Side Approach.” Empirical Economics 26(2001):367–389.CrossRefGoogle Scholar
Luhta, I., and Virtanen, I.. “Non-linear Advertising Capital Model with Time Delayed Feedback between Advertising and the Stock of Goodwill.” Chaos, Solitons, and Fractals 7(1996):2083–2104.Google Scholar
McCalla, A.F., and Valdes, A.. “Diversification and International Trade.” Paper prepared for the XXIII International Conference of Agricultural Economists, Sacramento, CA, August 16-17, 1997.Google Scholar
Nerlove, M., and Arrow, K.J.. “Optimal Advertising Policy under Dynamic Conditions.” Economica 114(1962): 129–142.CrossRefGoogle Scholar
Office of Management and Budget. Terminations, Reductions, and Savings: Budget of the U.S. Government, Fiscal Year 2011. Washington, DC: White House, 2010.Google Scholar
Phillips, P.C.B., and Hansen, B.. “Statistical Inference in Instrumental Variables Regression with 7(1) Processes.” The Review of Economic Studies 57(1990):99–125.CrossRefGoogle Scholar
Phlips, L. Applied Consumption Analysis: Revised and Enlarged Edition. Amsterdam, The Netherlands: North-Holland Publishing Company, 1990.Google Scholar
Rusmevichientong, R, and Kaiser, H.M.. “Measuring the Effectiveness of U.S. Rice Export Promotion Programs.” Agribusiness 25(2009):215–230.CrossRefGoogle Scholar
Sethi, S.P. “Dynamic Optimal Control Models in Advertising: A Survey.” SIAM Review 19(1977): 685–725.CrossRefGoogle Scholar
Stansel, D. “Federal Export Promotion Programs.” Congressional Testimony before the Committee on Small Business, United States House of Representatives. Cato Institute. May 23, 1995.Google Scholar
Thompson, M. 2004. “U.S. and Competitor Expenditures for Export Promotion on Agricultural, Forestry, and Fishery Products.” U.S. Department of Agriculture, Foreign Agricultural Service, p. 1–76.Google Scholar
Tomek, W.G., and Kaiser, H.M.. “On Improving Econometric Analysis of Generic Advertising Impacts.” Agribusiness 15(1999):485–500.3.0.CO;2-8>CrossRefGoogle Scholar
U.S. Department of Agriculture, Economic Research Service. Internet site: www.ers.usda.gov/Data/Fatus/#calendar (Accessed April 20, 2010a).Google Scholar
U.S. Department of Agriculture, Economic Research Service. Internet site: www.ers.usda.gov/Data/Macroeconomics/ (Accessed April 20, 2010b).Google Scholar
U.S. Government Accountability Office. Changes Made to Market Access Program, but Questions Remain about Economic Impact. GAO/NSIAD-99-38. April 1999.Google Scholar
U.S. Government Accountability Office. USDA Is Monitoring Market Development Program as Required but Could Improve Analysis of Impact. GAO/NSIAD-99-38. April 2013.Google Scholar
Wohlgenant, M.K. “Distribution of Gains from Research and Promotion in Multistage Production Systems.” American Journal of Agricultural Economics 75(1993):642–651.CrossRefGoogle Scholar
Wohlgenant, M.K. “Distribution of Gains from Research and Promotion in Multistage Production Systems: Reply.” American Journal of Agricultural Economics 81(1999): 598–600.CrossRefGoogle Scholar