Does trade openness reduce a domestic fisheries catch?

Does trade openness reduce a domestic fisheries catch? Although trade liberalization may increase a country’s welfare, its specific effect on a country’s fishing industry has not been well studied. By decomposing the effect of international trade into four parts, i.e., scale-technique effects (ST), the indirect trade-induced composition effect (IC), the indirect effect of trade intensity through income (ITC), and the direct effect of trade intensity (DTC), this study empirically investigates the effect of trade openness on country-level fisheries production. To take into account the endogeneity of trade openness and income, we adopt the instrumental variable approach. We find that a rise in trade openness reduces fisheries catch on average. In particular, the long-run effect is large. This result implies that future production is affected by current overfishing through stock dynamics. Our decomposed elasticities indicate that the ST and ITC dominate in the trade elasticity of fisheries catch. While ST implies that overfishing would be affected by trade, ITC may either establish an “overfishing haven”, similar to a “pollution haven” in the environmental literature, or production shift of fisheries to countries with lax regulation to pass stringent regulation, which is more likely to occur in high-income countries. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Fisheries Science Springer Journals

Does trade openness reduce a domestic fisheries catch?

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Publisher
Springer Journals
Copyright
Copyright © 2017 by Japanese Society of Fisheries Science
Subject
Life Sciences; Fish & Wildlife Biology & Management; Freshwater & Marine Ecology; Food Science
ISSN
0919-9268
eISSN
1444-2906
D.O.I.
10.1007/s12562-017-1130-0
Publisher site
See Article on Publisher Site

Abstract

Although trade liberalization may increase a country’s welfare, its specific effect on a country’s fishing industry has not been well studied. By decomposing the effect of international trade into four parts, i.e., scale-technique effects (ST), the indirect trade-induced composition effect (IC), the indirect effect of trade intensity through income (ITC), and the direct effect of trade intensity (DTC), this study empirically investigates the effect of trade openness on country-level fisheries production. To take into account the endogeneity of trade openness and income, we adopt the instrumental variable approach. We find that a rise in trade openness reduces fisheries catch on average. In particular, the long-run effect is large. This result implies that future production is affected by current overfishing through stock dynamics. Our decomposed elasticities indicate that the ST and ITC dominate in the trade elasticity of fisheries catch. While ST implies that overfishing would be affected by trade, ITC may either establish an “overfishing haven”, similar to a “pollution haven” in the environmental literature, or production shift of fisheries to countries with lax regulation to pass stringent regulation, which is more likely to occur in high-income countries.

Journal

Fisheries ScienceSpringer Journals

Published: Sep 15, 2017

References

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