THE GROWING IMPORT AND DOMESTIC PRODUCTION OF OLIVE OIL IN JAPAN: THE APPLICATION OF THE GRAVITY MODEL

As the size of the global olive oil market has been rapidly growing, new markets emerged outside Europe, particularly in the Asia-pacific region. Japan, as an export destination, is an emerging market for olive oil in East Asia. This chapter investigates the determinant factors that affect Japan...

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Bibliographic Details
Published inCurrent politics and economics of Northern and Western Asia Vol. 26; no. 1; pp. 73 - 95
Main Author Kashiwagi, Kenichi
Format Journal Article
LanguageEnglish
Published Hauppauge Nova Science Publishers, Inc 01.01.2017
Subjects
Agricultural economics
Commodities
Consumers
Density
Differentiation
Econometrics
Economic models
Emerging markets
Endowment
Exports
GDP
Gravity
Gross Domestic Product
Imports
International trade
Market shares
Markets
Monopolistic competition
Olive oil
Panel data
Product differentiation
Resistance
Greece
Turkey
United States > US
Asia
Japan
Europe
Brazil
Australia
Mediterranean Area
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Summary:As the size of the global olive oil market has been rapidly growing, new markets emerged outside Europe, particularly in the Asia-pacific region. Japan, as an export destination, is an emerging market for olive oil in East Asia. This chapter investigates the determinant factors that affect Japan's olive oil imports. Based on unbalanced panel data of Japan's olive oil imports from 15 trade partners from 1988 to 2013, the commodity-specific gravity model is estimated. The results suggest that an increase in the GDP of Japan and its trade partners has a positive effect and the distance between them is a resistance factor. The difference in factor endowments has a negative impact on olive oil imports, whereas increasing domestic production has a positive effect on the flow of imports. Together with the fact that Japan increased its olive oil exports, these results indicate the development of an intra-industry olive oil trade and support the concept of a new trade theory rather than the traditional Heckscher-Ohlin discussion. These findings imply that promotion of the export of varieties of olive oil through product differentiation would be more relevant to explore Japan's emerging market, rather than producing a large quantity sold at a lower price.
ISSN:2158-5865