Influence of Ukraine's accession to the EU free trade zone on the state of the internal food market
DOI:
https://doi.org/10.31548/bioeconomy2019.01.093Keywords:
impact of EU market, time series, econometric analysis, price variance, lags, dummy variable, market stabilizationAbstract
The purpose of the article is an analysis of available quantitative information on changes in the state of the domestic and world (European) food markets under the influence of Ukraine's accession to the free trade area with the EU. The work is used monthly data of observations of the prices of wheat and corn from 2000 to 2018. The entire time interval is divided into two parts before entering the free trade zone and after. The research methodology is based on the use of methods of statistical and econometric analysis of price observations time series on Ukrainian and European food markets. The presence of the impact of accession to the FTA is determined by a dummy variable separating the time of receipt of trade preferences from the previous period of time. To calculate the lag between the price variations of the European market and the domestic food market of Ukraine, the cross correlation function of these dynamic processes calculated in the medium R is used.The level of domestic corn and wheat prices was largely determined by the EU prices, and if for corn prices lag for Ukraine is practically absent for monthly discreteness of observations, then for wheat there is a two-month lag of delay in prices of the domestic market of Ukraine relative to the EU market.
It was shown that joining the FTA with the EU stabilized the price level both in the internal food market and in the EU market. As for the increase in the price level of the domestic market for grain, it was observed only for corn (20%) for wheat, the price level of the domestic market decreased by 7%. The results of the statistical analysis of changes in the EU and Ukrainian market prices are confirmed by the results of an econometric analysis that uses an dummy variable to allocate the time to enter a free trade zone. Joining the FTA had a positive stabilizing effect on Ukraine food market. As a result of joining the free trade zone with the EU, the dispersion of prices for wheat and corn both in the EU market and in the domestic market of Ukraine significantly decreased. The presented studies provide a methodological basis for forecasting the state of the internal food market based on existing forecasts of the price dynamics in the EU market.
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