U.S. County-level Impacts of Growth in China's Demand for Agricultural Imports

Yichuan Cheng, Purdue University

Abstract

This thesis uses county-level data on agricultural outcomes and data on China’s imports of field crops to study the effect of growing U.S. agricultural exports to China on U.S. county-level outcomes. A well-known instrumental variables strategy is used to isolate the Chinese import demand shock from other determinants of bilateral trade growth. I find substantial variation across U.S. counties in their exposure to rising import demand for agricultural products in China. The first stage regressions indicate that a large share of the variation in counties’ growing export exposure to China is attributable to China’s import demand shock. The second stage results, however, indicate that 15 years of Chinese import growth had relatively inconclusive effects but highly differential in terms of exposure difference on the agricultural outcomes. I attribute modest increases in total cropland acres to Chinese import demand growth, but the results for other county-level outcomes are weak and fragile. The China trade shock appears to have had smaller consequences in agriculture than in manufacturing. It is likely that the consequences of the China shock on agriculture were subsumed by other shocks that occurred during this period. It is also likely that the effects of the shock were muted by farmers’ ability to switch crops over time.

Degree

M.S.

Advisors

Hillberry, Purdue University.

Subject Area

Economics|Agricultural economics

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