Does Globalization Enhance Food Security: Empirical Evidence for Latin America and the Caribbean
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Abstract
Despite significant progress in reducing poverty since the 1990s, many countries still face a significant problem in achieving food security. Nearly 10% of the world’s population faced hunger in 2022, and this figure has unfortunately been accelerated because of global developments, such as the COVID-19 pandemic and the Russia-Ukraine war. This study attempts to investigate the impact of globalization on food security in 27 Latin America and the Caribbean (LAC) countries by using annual data covering the 2001-2021 period. The Driscoll & Kraay standard error and panel corrected standard error (PCSE) estimators show that globalization, arable land, population, economic growth, and institutional quality enhance food security, but inflation worsens it.
JEL Codes: F15, F62, Q18
Keywords: Food security, Food insecurity, Globalization, Latin America and the Caribbean (LAC), Driscoll & Kraay, PCSE
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Cengiz, O. and Demir, Ömer (2024) “Does Globalization Enhance Food Security: Empirical Evidence for Latin America and the Caribbean”, World Journal of Applied Economics, 10(2), pp. 73-86. doi: 10.22440/wjae.10.2.3.
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Research Articles
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References
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Barlow, P., Loopstra, R., Tarasuk, V., & Reeves, A. (2020). Liberal trade policy and food insecurity across the income distribution: an observational analysis in 132 countries, 2014-17. The Lancet Global Health, 8 (8), e1090-e1097. doi:10.1016/S2214-109X(20)30263-1
Bayar, Y. (2019). Globalization and food insecurity in the Middle East and North Africa: a panel cointegration and causality analysis. Ukrainian Journal of Food Science, 7 (1), 141-153. doi:10.24263/2310-1008-2019-7-1-15
Beck, N., & Katz, J. N. (1995). What to do (and not to do) with time-series cross-section data. American Political Science Review, 89 (3), 634-647. doi:10.2307/2082979
Benites-Zapata, V. A., Urrunaga-Pastor, D., Solorzano-Vargas, M. L., Herrera-Anazco, P., Uyen-Cateriano, A., Bendezu-Quispe, G., . . . Hernandez, A. V. (2021). Prevalence and factors associated with food insecurity in Latin America and the Caribbean during the first wave of the COVID-19 pandemic. Heliyon, 7 (10), e08091. doi:10.1016/j.heliyon.2021.e08091
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Biniaz, A., & Mohamadi, H. (2018). The effect of agriculture trade openness on food security in Iran (ARDL Approach). Agricultural Economics Research, 10 (38), 81-104.
Breusch, T. S., & Pagan, A. R. (1980). The Lagrange Multiplier test and its applications to model specification in econometrics. The Review of Economic Studies, 47 (1), 239-253. doi:10.2307/2297111
Chang, Y., Chatterjee, S., & Kim, J. (2014). Household finance and food insecurity. Journal of Family and Economic Issues, 35, 499-515. doi:10.1007/s10834-013-9382-z
Dithmer, J., & Abdulai, A. (2017). Does trade openness contribute to food security? A dynamic panel analysis. Food Policy, 69, 218-230. doi:10.1016/j.foodpol.2017.04.008
Dreher, A. (2006). Does globalization affect growth? Evidence from a new index of globalization. Applied Economics, 38 (10), 1091-1110. doi:10.1080/00036840500392078
Dreher, A., Gaston, N., & Martens, P. (2008). Measuring globalization-gauging its consequences. Springer: New York.
Driscoll, J. C., & Kraay, A. C. (1998). Consistent covariance matrix estimation with spatially dependent panel data. Review of Economics and Statistics, 80 (4), 549-560. doi:10.1162/003465398557825
FAO, IFAD, UNICEF, WFP, & WHO. (2023). The state of food security and nutrition in the World 2023. Urbanization, agrifood systems transformation and healthy diets across the rural-urban continuum. FAO: Rome. doi:10.4060/cc3017en
Ferreira, E., Fuinhas, J. A., & Moutinho, V. (2022). An investigation of the environmental Kuznets relationship in BRICS countries at a sectoral economic level. Energy Systems, 13, 1031-1054. doi:10.1007/s12667-021-00459-3
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Ge, J., Polhill, J. G., Macdiarmid, J. I., Fitton, N., Smith, P., Clark, H., . . . Aphale, M. (2021). Food and nutrition security under global trade: a relation-driven agent-based global trade model. Royal Society Open Science, 8 (1), 201587. doi:10.1098/rsos.201587
Gygli, S., Haelg, F., Potrafke, N., & Sturm, J. E. (2019). The KOF globalization index revisited. The Review of International Organizations, 14, 543-574. doi:10.1007/s11558-019-09344-2
Heckscher, E. F. (1919). The effect of foreign trade on the distribution of income. Ekonomisk Tidskrift, 21 (2), 1-32.
Herath, H. M. S. P. (2014). Has trade liberalization improved food security? A comparative study on China and Sri Lanka. European Journal of Business and Management, 6 (18), 62-67.
Herforth, A., Venkat, A., Bai, Y., Costlow, L., Holleman, C., & Masters, W. (2022). Methods and options to monitor globally the cost and affordability of a healthy diet globally Background paper for The State of Food Security and Nutrition in the World 2022 (Agricultural Development Economics Working Paper No. 22-03). FAO. doi:10.4060/cc1169en
Hernandez-Vasquez, A., Visconti-Lopez, F. J., Chacon-Torrico, H., & Azanedo, D. (2023). COVID-19 and Food Insecurity in Latin America and the Caribbean. Journal of Hunger & Environmental Nutrition, 18 (3), 372-379. doi:10.1080/19320248.2022.2086023
Huber, E., & Stephens, J. (2009). Globalization and inequality in Latin America and the Caribbean. In A. C. Sobel (Ed.), Challenges of globalization: immigration, social welfare, global governance (p. 127-153). Routledge: London & New York.
Koengkan, M., Fuinhas, J. A., & Santiago, R. (2020). Asymmetric impacts of globalization on CO2 emissions of countries in Latin America and the Caribbean. Environment Systems and Decisions, 40, 135-147. doi:10.1007/s10669-019-09752-0
Koomson, I., Asongu, S. A., & Acheampong, A. O. (2023). Financial inclusion and food insecurity: examining linkages and potential pathways. Journal of Consumer Affairs, 57 (1), 418-444. doi:10.1111/joca.12505
Mulyo, J. H., Prasada, I. Y., & Nugroho, A. D. (2023). Impact of political and security stability on food security in developing countries: case of Africa, Asia, Latin America and the Caribbean. Agricultural Economics (Zemedelska Ekonomika), 69 (9), 375-384. doi:10.17221/142/2023-agricecon
Nawaz, A., & Rahman, M. M. (2023). Renewable energy consumption in sub-Saharan Africa: the role of human capital, foreign direct investment, financial development, and institutional quality. Energy Reports, 10, 3383-3393. doi:10.1016/j.egyr.2023.10.025
Ocampo, J. A., Martin, J., Nations, U., & for Latin America, E. C. (2003). Globalization and development: a Latin American and Caribbean Perspective. Stanford University Press: California.
Ohlin, B. (1933). Interregional and International Trade. Harvard University Press: Cambridge.
Pata, U. K., Kartal, M. T., Dam, M. M., & Kaya, F. (2023). Navigating the impact of renewable energy, trade openness, income, and globalization on load capacity factor: the case of Latin American and Caribbean (LAC) countries. International Journal of Energy Research, 2023, 6828781. doi:10.1155/2023/6828781
Pesaran, M. H. (2004). General Diagnostic Tests for Cross Section Dependence in Panels (Discussion Paper No. 1240). The Institute for the Study of Labor (IZA). https://docs.iza.org/dp1240.pdf.
Pizarro, J. M., & Villa, M. (2005). International migration in Latin America and the Caribbean: a summary view of trends and patterns. In UN Expert Group Meeting on International Migration and Development. https://www.un.org/en/development/desa/population/events/pdf/expert/8/P14_JMartinez_ECLAC.pdf
Ridwan, M., Urbee, A. J., Voumik, L. C., Das, M. K., Rashid, M., & Esquivias, M. A. (2024). Investigating the environmental Kuznets curve hypothesis with urbanization, industrialization, and service sector for six South Asian Countries: fresh evidence from Driscoll Kraay standard error. Research in Globalization, 8, 100223. doi:10.1016/j.resglo.2024.100223
Santiago, R., Fuinhas, J. A., & Marques, A. C. (2020). The impact of globalization and economic freedom on economic growth: the case of the Latin America and Caribbean countries. Economic Change and Restructuring, 53, 61-85. doi:10.1007/s10644-018-9239-4
Santiago, R. F. D. B. (2017). The impact of globalization and economic freedom on economic growth: the case of Latin American and Caribbean Countries (Master’s Thesis). Universidade da Beira Interior (Portugal).
Shang, Y., Lv, Y., Chen, Z., Bassey, R., Aderemi, T. A., & Enilolobo, O. (2024). Globalization and food security in Sub-Saharan Africa. Frontiers in Sustainable Food Systems, 8, 1325172. doi:10.3389/fsufs.2024.1325172
Slimane, M., Huchet-Bourdon, M., & Zitouna, H. (2016). The role of sectoral FDI in promoting agricultural production and improving food security. International Economics, 145, 50-65. doi:10.1016/j.inteco.2015.06.001
Sun, Z., & Zhang, D. (2021). Impact of trade openness on food security: evidence from panel data for central Asian countries. Foods, 10, 3012. doi:10.3390/foods10123012
Tekin, I., & Cengiz, O. (2017). Nexus between financial development and inequality: an empirical investigation of financial Kuznets curve for selected EU countries. The Empirical Economics Letters, 16 (7), 687-696. doi:10.3390/foods10123012
Tinta, A. A., Sarpong, D. B., Ouedraogo, I. M., Al Hassan, R., Mensah-Bonsu, A., & Onumah, E. B. (2018). The effect of integration, global value chains and international trade on economic growth and food security in ECOWAS. Cogent Food & Agriculture, 4 (1), 1465327. doi:10.1080/23311932.2018.1465327
UNCTAD. (2023). Productive capacities index 2nd generation: enhanced statistical and methodological approach with results. https://unctad.org/system/files/official-document/aldc2023d2 en.pdf.
UNCTAD. (2024). United Nations Conference on Trade and Development Database. https://unctadstat.unctad.org/datacentre/dataviewer/US.Cpi_A.
United Nations. (2024). United Nations Sustainable Development Goals. https://sdgs.un.org/goals/goal2.
Wooldridge, J. M. (2010). Econometric analysis of cross-section and panel data. MIT Press: Cambridge.
World Bank. (2024). World Bank Open Data. https://data.worldbank.org/.
Xu, Y., Wang, Z., Dong, W., & Chou, J. (2023). Predicting the potential impact of emergency on global grain security: a case of Russia-Ukraine conflict. Foods, 12 (13), 2557. doi:10.3390/foods12132557
Yao, H., Alhussam, M. I., Risha, O. A., & Memon, B. A. (2020). Analyzing the relationship between agricultural FDI and food security: evidence from belt and road countries. Sustainability, 12 (7), 2906. doi:10.3390/su12072906
Akinlo, T., & Dada, J. T. (2022). Information technology, real sector and economic growth in sub-Saharan Africa: a cross-sectional dependence approach. Quality & Quantity, 56, 4241-4267. doi:10.1007/s11135-021-01308-2
Asteriou, D., & Hall, S. G. (2011). Applied Econometrics (2. ed.). Palgrave Macmillan: New York.
Awad, A. (2023). The determinants of food insecurity among developing countries: are there any differences? Scientific African, 19, e01512. doi:10.1016/j.sciaf.2022.e01512
Balouza, M. (2018). The effect of sectoral FDI on food security in developing countries. BAU Journal - Health and Wellbeing, 1 (3), 1-8. doi:10.54729/2789-8288.1080
Baltagi, B. (2021). Econometric Analysis of Panel Data (6. ed.). Springer: Cham.
Barlow, P., Loopstra, R., Tarasuk, V., & Reeves, A. (2020). Liberal trade policy and food insecurity across the income distribution: an observational analysis in 132 countries, 2014-17. The Lancet Global Health, 8 (8), e1090-e1097. doi:10.1016/S2214-109X(20)30263-1
Bayar, Y. (2019). Globalization and food insecurity in the Middle East and North Africa: a panel cointegration and causality analysis. Ukrainian Journal of Food Science, 7 (1), 141-153. doi:10.24263/2310-1008-2019-7-1-15
Beck, N., & Katz, J. N. (1995). What to do (and not to do) with time-series cross-section data. American Political Science Review, 89 (3), 634-647. doi:10.2307/2082979
Benites-Zapata, V. A., Urrunaga-Pastor, D., Solorzano-Vargas, M. L., Herrera-Anazco, P., Uyen-Cateriano, A., Bendezu-Quispe, G., . . . Hernandez, A. V. (2021). Prevalence and factors associated with food insecurity in Latin America and the Caribbean during the first wave of the COVID-19 pandemic. Heliyon, 7 (10), e08091. doi:10.1016/j.heliyon.2021.e08091
Beylik, U., Cirakli, U., Cetin, M., Ecevit, E., & Senol, O. (2022). The relationship between health expenditure indicators and economic growth in OECD countries: a Driscoll-Kraay approach. Frontiers in Public Health, 10, 1050550. doi:10.3389/fpubh.2022.1050550
Biniaz, A., & Mohamadi, H. (2018). The effect of agriculture trade openness on food security in Iran (ARDL Approach). Agricultural Economics Research, 10 (38), 81-104.
Breusch, T. S., & Pagan, A. R. (1980). The Lagrange Multiplier test and its applications to model specification in econometrics. The Review of Economic Studies, 47 (1), 239-253. doi:10.2307/2297111
Chang, Y., Chatterjee, S., & Kim, J. (2014). Household finance and food insecurity. Journal of Family and Economic Issues, 35, 499-515. doi:10.1007/s10834-013-9382-z
Dithmer, J., & Abdulai, A. (2017). Does trade openness contribute to food security? A dynamic panel analysis. Food Policy, 69, 218-230. doi:10.1016/j.foodpol.2017.04.008
Dreher, A. (2006). Does globalization affect growth? Evidence from a new index of globalization. Applied Economics, 38 (10), 1091-1110. doi:10.1080/00036840500392078
Dreher, A., Gaston, N., & Martens, P. (2008). Measuring globalization-gauging its consequences. Springer: New York.
Driscoll, J. C., & Kraay, A. C. (1998). Consistent covariance matrix estimation with spatially dependent panel data. Review of Economics and Statistics, 80 (4), 549-560. doi:10.1162/003465398557825
FAO, IFAD, UNICEF, WFP, & WHO. (2023). The state of food security and nutrition in the World 2023. Urbanization, agrifood systems transformation and healthy diets across the rural-urban continuum. FAO: Rome. doi:10.4060/cc3017en
Ferreira, E., Fuinhas, J. A., & Moutinho, V. (2022). An investigation of the environmental Kuznets relationship in BRICS countries at a sectoral economic level. Energy Systems, 13, 1031-1054. doi:10.1007/s12667-021-00459-3
Gasparini, L., Cruces, G., Tornarolli, L., & Marchionni, M. (2009). A turning point? Recent developments on inequality in Latin America and the Caribbean (Working Papers No. 0081). CEDLAS, Universidad Nacional de La Plata. http://cedlas.econo.unlp.edu.ar/archivos upload/doc cedlas81.pdf.
Ge, J., Polhill, J. G., Macdiarmid, J. I., Fitton, N., Smith, P., Clark, H., . . . Aphale, M. (2021). Food and nutrition security under global trade: a relation-driven agent-based global trade model. Royal Society Open Science, 8 (1), 201587. doi:10.1098/rsos.201587
Gygli, S., Haelg, F., Potrafke, N., & Sturm, J. E. (2019). The KOF globalization index revisited. The Review of International Organizations, 14, 543-574. doi:10.1007/s11558-019-09344-2
Heckscher, E. F. (1919). The effect of foreign trade on the distribution of income. Ekonomisk Tidskrift, 21 (2), 1-32.
Herath, H. M. S. P. (2014). Has trade liberalization improved food security? A comparative study on China and Sri Lanka. European Journal of Business and Management, 6 (18), 62-67.
Herforth, A., Venkat, A., Bai, Y., Costlow, L., Holleman, C., & Masters, W. (2022). Methods and options to monitor globally the cost and affordability of a healthy diet globally Background paper for The State of Food Security and Nutrition in the World 2022 (Agricultural Development Economics Working Paper No. 22-03). FAO. doi:10.4060/cc1169en
Hernandez-Vasquez, A., Visconti-Lopez, F. J., Chacon-Torrico, H., & Azanedo, D. (2023). COVID-19 and Food Insecurity in Latin America and the Caribbean. Journal of Hunger & Environmental Nutrition, 18 (3), 372-379. doi:10.1080/19320248.2022.2086023
Huber, E., & Stephens, J. (2009). Globalization and inequality in Latin America and the Caribbean. In A. C. Sobel (Ed.), Challenges of globalization: immigration, social welfare, global governance (p. 127-153). Routledge: London & New York.
Koengkan, M., Fuinhas, J. A., & Santiago, R. (2020). Asymmetric impacts of globalization on CO2 emissions of countries in Latin America and the Caribbean. Environment Systems and Decisions, 40, 135-147. doi:10.1007/s10669-019-09752-0
Koomson, I., Asongu, S. A., & Acheampong, A. O. (2023). Financial inclusion and food insecurity: examining linkages and potential pathways. Journal of Consumer Affairs, 57 (1), 418-444. doi:10.1111/joca.12505
Mulyo, J. H., Prasada, I. Y., & Nugroho, A. D. (2023). Impact of political and security stability on food security in developing countries: case of Africa, Asia, Latin America and the Caribbean. Agricultural Economics (Zemedelska Ekonomika), 69 (9), 375-384. doi:10.17221/142/2023-agricecon
Nawaz, A., & Rahman, M. M. (2023). Renewable energy consumption in sub-Saharan Africa: the role of human capital, foreign direct investment, financial development, and institutional quality. Energy Reports, 10, 3383-3393. doi:10.1016/j.egyr.2023.10.025
Ocampo, J. A., Martin, J., Nations, U., & for Latin America, E. C. (2003). Globalization and development: a Latin American and Caribbean Perspective. Stanford University Press: California.
Ohlin, B. (1933). Interregional and International Trade. Harvard University Press: Cambridge.
Pata, U. K., Kartal, M. T., Dam, M. M., & Kaya, F. (2023). Navigating the impact of renewable energy, trade openness, income, and globalization on load capacity factor: the case of Latin American and Caribbean (LAC) countries. International Journal of Energy Research, 2023, 6828781. doi:10.1155/2023/6828781
Pesaran, M. H. (2004). General Diagnostic Tests for Cross Section Dependence in Panels (Discussion Paper No. 1240). The Institute for the Study of Labor (IZA). https://docs.iza.org/dp1240.pdf.
Pizarro, J. M., & Villa, M. (2005). International migration in Latin America and the Caribbean: a summary view of trends and patterns. In UN Expert Group Meeting on International Migration and Development. https://www.un.org/en/development/desa/population/events/pdf/expert/8/P14_JMartinez_ECLAC.pdf
Ridwan, M., Urbee, A. J., Voumik, L. C., Das, M. K., Rashid, M., & Esquivias, M. A. (2024). Investigating the environmental Kuznets curve hypothesis with urbanization, industrialization, and service sector for six South Asian Countries: fresh evidence from Driscoll Kraay standard error. Research in Globalization, 8, 100223. doi:10.1016/j.resglo.2024.100223
Santiago, R., Fuinhas, J. A., & Marques, A. C. (2020). The impact of globalization and economic freedom on economic growth: the case of the Latin America and Caribbean countries. Economic Change and Restructuring, 53, 61-85. doi:10.1007/s10644-018-9239-4
Santiago, R. F. D. B. (2017). The impact of globalization and economic freedom on economic growth: the case of Latin American and Caribbean Countries (Master’s Thesis). Universidade da Beira Interior (Portugal).
Shang, Y., Lv, Y., Chen, Z., Bassey, R., Aderemi, T. A., & Enilolobo, O. (2024). Globalization and food security in Sub-Saharan Africa. Frontiers in Sustainable Food Systems, 8, 1325172. doi:10.3389/fsufs.2024.1325172
Slimane, M., Huchet-Bourdon, M., & Zitouna, H. (2016). The role of sectoral FDI in promoting agricultural production and improving food security. International Economics, 145, 50-65. doi:10.1016/j.inteco.2015.06.001
Sun, Z., & Zhang, D. (2021). Impact of trade openness on food security: evidence from panel data for central Asian countries. Foods, 10, 3012. doi:10.3390/foods10123012
Tekin, I., & Cengiz, O. (2017). Nexus between financial development and inequality: an empirical investigation of financial Kuznets curve for selected EU countries. The Empirical Economics Letters, 16 (7), 687-696. doi:10.3390/foods10123012
Tinta, A. A., Sarpong, D. B., Ouedraogo, I. M., Al Hassan, R., Mensah-Bonsu, A., & Onumah, E. B. (2018). The effect of integration, global value chains and international trade on economic growth and food security in ECOWAS. Cogent Food & Agriculture, 4 (1), 1465327. doi:10.1080/23311932.2018.1465327
UNCTAD. (2023). Productive capacities index 2nd generation: enhanced statistical and methodological approach with results. https://unctad.org/system/files/official-document/aldc2023d2 en.pdf.
UNCTAD. (2024). United Nations Conference on Trade and Development Database. https://unctadstat.unctad.org/datacentre/dataviewer/US.Cpi_A.
United Nations. (2024). United Nations Sustainable Development Goals. https://sdgs.un.org/goals/goal2.
Wooldridge, J. M. (2010). Econometric analysis of cross-section and panel data. MIT Press: Cambridge.
World Bank. (2024). World Bank Open Data. https://data.worldbank.org/.
Xu, Y., Wang, Z., Dong, W., & Chou, J. (2023). Predicting the potential impact of emergency on global grain security: a case of Russia-Ukraine conflict. Foods, 12 (13), 2557. doi:10.3390/foods12132557
Yao, H., Alhussam, M. I., Risha, O. A., & Memon, B. A. (2020). Analyzing the relationship between agricultural FDI and food security: evidence from belt and road countries. Sustainability, 12 (7), 2906. doi:10.3390/su12072906