Determinants of Fruit and Vegetable Exports through the Gravity Model Approach: In The Case of Uzbekistan

ABSTRACT

The paper assesses the factors influencing Uzbekistan’s fruit and vegetable export growth to its cardinal destinations. It employs conventional gravity model covering Uzbekistan’s fruit and vegetable export flows for the period 2017-2020. A gravity model with Pooled, Fixed and Random effects approach on panel data was used to present investigation of trade flows that has been validated as a suitable tool in determining export growth. The Poisson Pseudo-Maximum Likelihood regression (PPML) is used to reveal effect of the key agricultural export variables such as market and economic size (GDP per capita and population), transportation costs (distance), information costs (common colonizer), and institutional quality factors (rule of law).The findings indicate that an improvement in Uzbekistan and importer’s GDP causes an increase in fruit and vegetables exports by 0.29 and 0.248 percent relatively. Distance has been shown to have a negative influence on the growth of exports to its trading partners by 2.079 percent. The importer’s population and the export capacity showed a positive relationship on the growth of Uzbekistan’s export capacity, with 6.021 percent increase. Therefore, the results suggest that Uzbekistan should focus on neighboring countries with a growing population and GDP to improve fruit and vegetable export growth and market diversification. Additionally, the results suggest that the more efficient the role of a favorable institutional environment in partner and reporter countries, the more the gain from the export, lowering trade transaction costs (2.887 and 7.946 percent accordingly).

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