Abstract:
Objective/Meaning Trade policy uncertainty is an important factor affecting international trade. Studying the effect of Taiwan’s trade policy uncertainty on cross-strait agricultural trade plays an important part of revelation in how to effectively deal with trade policy uncertainty and promoting cross-strait agricultural trades.
Methods/Procedures Trade policy uncertainty is measured by tariff trade uncertainty, political shock and technical barriers to trade.Based on the uncertainty-augmented gravity model and the two-way fixed effects model, this paper estimates and quantifies the impact of Taiwan’s trade policy uncertainty on Taiwan’s agricultural exports to the Mainland.Besides,the influencing mechanism of trade is further evaluated by dual decomposition.
Results/Conclusions The paper finds that reduced tariff trade uncertainty increased Taiwan’s agricultural exports to the Mainland,but political shock and technical barriers to trade lowered the agricultural exports.Trade policy uncertainty had a significant impact on the exports of fruits and vegetables, livestock and aquatic products.These influences were realized mainly through the intensive trade margin and had no lag,but the effect of technical barriers to trade on the agricultural exports was realized by both the intensive trade margin and the extensive trade margin.