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Abstract
The global food marketing network is being constantly reshaped, providing
opportunities and challenges to the use of information and communication technology
(ICT) to develop international trade in food products. ICT is likely to be especially
important for food products such as fresh fruit and vegetables that are differentiated
and sensitive to timeliness in supply, possess varied quality dimensions, and involve
considerable supply accumulation and assortment. Digital ICT (Internet and mobile
phones), in particular, is expected to facilitate international trade and encourage
efficiency in the fruit and vegetables marketing system in two main ways. First, it
reduces communication and search costs through cheaper and more effective media.
Second, it improves market information and corrects information externalities along
the supply chain, by promoting greater price transparency and enabling consumer
preferences and tastes to be more precisely met.
We employed a gravity model of international trade to test the hypothesis that ICT
positively affects bilateral international trade in fruit and vegetables between member
Asia-Pacific Economic Cooperation (APEC) economies in the period from 1997 to
2006. Explanatory variables include the usage of the Internet, mobile telephones and
fixed telephone lines, and a broad range of factors that might determine the value of
bilateral trade such as income per capita, population, distance between trading
partners and common language. A Poisson pseudo-maximum likelihood model was
estimated in order to handle zero trade observations and reduce biases caused by
heteroskedasticity. Empirical results were not quite as expected, with relatively minor
impact of digital ICT. They suggest that using digital ICT has significant positive
effects on trade in fruit and vegetables between APEC countries only for the Internet
in exporting countries. A stronger positive impact was discerned for the traditional
form of ICT, fixed telephone lines in exporting importing countries. Nevertheless,
fostering the development of digital ICT infrastructure and its diffusion should make
exporters in APEC countries more competitive in the fruit and vegetables supply
chain through the Internet effect, and boost their trade values in these products.