Competitiveness in the trade of spices: A global evidence

Comparative advantage is an important indicator in the analysis of international trade flow, however, in empirical studies on agriculture it is often neglected. In this article we aim to analyse comparative advantage in global spices trade and to test stability of trade indices as well as to identify the determinants behind different country performances. Our paper draws global spices trade data from the period 1991 to 2015. Results suggest that global spice trade is pretty much concentrated with Guatemala, Sri Lanka and India obtaining the highest comparative advantages in 1991-2015. However, duration and stability tests indicate that trade advantages have weakened for the majority of the countries concerned. Our model runs show that factor endowments, agricultural value added and regional trade agreements are negatively, while land as well as labour productivity are positively related to comparative advantages in global spices trade. Acknowledgement : This paper was supported by the National Research, Development and Innovation Office Grant No. 119669 titled Competitiveness of Agriculture in International Trade: A Global Perspective as well as the UNKP-17-4-III-BCE-7 New National Excellence Program of the Ministry of Human Capacities of Hungary