Browsing by Subject "international trade"
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Item Essays on Impacts of Avian Influenza Outbreaks on Financial Markets(2011-02-22) Huang, WeiA recent outbreak of bird flu or avian influenza (AI), an especially highly pathogenic strain (HPAI) of H5N1, started in Hong Kong in January 2003 and caused 159 human deaths in Asia, Africa and Europe through early 2007. In addition, this outbreak resulted in millions of slaughtered birds and banned international trade of poultry meat in the infected countries. Such events harmed the poultry, tourism, and other related industries in the infected countries and changed the world poultry trade flow. Even in some uninfected countries, related industries were negatively affected. This study investigates the impact of bird flu outbreaks as manifested in financial markets within the US and Japan. The first essay explores how the avian influenza (AI) outbreaks impacted the security values of poultry-related firms. Using partial equilibrium analysis, this study infers that within a country AI outbreaks drop stock prices of poultry meat producers and raise stock prices of poultry food producers. Simultaneously, we infer that AI outbreaks in other poultry exporting countries raise stock prices of poultry meat producers and drop stock prices of poultry food producers. The empirical findings support our model results. Recent developments in time series method, directed graphs and search methods of cointegration rank are applied in this study. The second essay examines whether avian influenza outbreaks cause structural breaks in a model of their prices. It employs the dynamic programming algorithm and the reduced regression method for a cointegrated vector autoregressive (VAR) model to compute the break dates for the data sample. This research then compares the long run relation, and the short run relation and contemporaneous relation. The model estimations in these three sub-periods find these three sub-samples are significantly different. The breaks were caused by the invasion of Iraq on March 2003 and the 20 Bovine Spongiform Encephalopathy (BSE) induced ban of Canadian live cattle imports to the US on 03 March 2005, not by avian influenza outbreaks in early 2004. The third essay explores the effects of the avian influenza announcement in Japan on the prices of agricultural commodity futures contracts traded in Japan. Both the VAR model with asymmetric generalized autoregressive conditional heteroskedastic (GARCH) terms and the event study methods were used to examine whether avian influenza outbreaks significantly affected these markets. Our findings point out that the avian influenza outbreak only impacted the egg futures contract. These three essays found that outbreaks of avian influenza have significant impact on poultry-related stock prices and futures markets. The examined impacts changed the movement of those financial equity prices in the short run, but not in the long run. Research showed investors and poultry-related producers still encounter huge financial risk and loss.Item The impacts of improving Brazil's transportation infrastructure on the world soybean market(2009-05-15) Costa, Rafael de FariasThe lack of adequate transportation infrastructure in Brazil has been a bottleneck for the soybean producers for many years. Moreover, the costly inland transportation incurred from this bottleneck has resulted in a loss in competitiveness for Brazil compared to other exporting countries, especially the United States. If transportation costs are reduced by introducing improved infrastructure, Brazil is expected to increase its competitiveness in the world soybean market by increasing its exports and producer revenues. On the other hand, the United States and other significant soybean competing exporting countries are expected to lose market share as well as producer revenues. This study uses a spatial equilibrium model to analyze transportation infrastructure improvements proposed by the Brazilian government vis-?-vis enhance the nation?s soybean transportation network. The analyzed transportation improvements are: (i) the development of the Tapaj?s-Teles Pires waterway; (ii) the completion of the BR- 163 highway; (iii) the construction of the Mortes-Araguaia waterway; (iv) the Ferronorte railroad expansion to Rondon?polis and the linkage between the city of Rio Verde to Uberl?ndia; and (v) the Ferropar railroad expansion to the city of Dourados. The model specifies the Brazilian inland transportation network and the international ocean shipments. The model divides Brazil into 18 excess supply regions and 8 excess demand regions. The competing exporting countries are the United States, Argentina, Rest of South America (Bolivia, Paraguay, and Uruguay), Canada, and India. The importing countries are composed of China, European Union, Southeast Asia, Mexico, and the Rest of the World. Results suggest these proposed transportation improvements yield potential noteworthy gains to Brazil with producer revenues increasing more than $500 million and exports increasing by 177 thousand metric tons. Consequently, the world soybean price declines by $1.16 per metric ton and producer revenues and exports in the United States fall by 63 thousand metric tons and $104.89 million, respectively. Although the absolute gains in price, revenues, and exports for Brazil are considerable, they only represent in relative changes 1.48, 2.35, and 0.32 percent, respectively. Similarly, the loss in price, revenue, and export value for the United States is also low, declining by 0.23, 0.23, and 0.12 percent, respectively.