Catalyst or barrier? Impact of cereal trade on urbanization

Yang, Lijuan Article Catalyst or barrier? Impact of cereal trade on urbanization Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Yang, Lijuan (2024) : Catalyst or barrier? Impact of cereal trade on urbanization, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 11, Iss. 1, pp. 1-24, https://doi.org/10.1080/23311975.2024.2375997 This Version is available at: https://hdl.handle.net/10419/326415 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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Impact of cereal trade on urbanization Lijuan Yang To cite this article: Lijuan Yang (2024) Catalyst or barrier? Impact of cereal trade on urbanization, Cogent Business & Management, 11:1, 2375997, DOI: 10.1080/23311975.2024.2375997 To link to this article: https://doi.org/10.1080/23311975.2024.2375997 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group Published online: 13 Jul 2024. Submit your article to this journal Article views: 317 View related articles View Crossmark data Citing articles: 1 View citing articles Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 ManageMent | ReseaRch aRticle Cogent Business & ManageMent 2024, VoL. 11, no. 1, 2375997 Catalyst or barrier? Impact of cereal trade on urbanization lijuan Yang school of economics, Lanzhou university, Lanzhou, China ABSTRACT clarifying the impact of cereal trade on urbanization is crucial for enhancing effective food security policies and promoting sustainable urban development. however, the heterogeneous impact of the cereal trade on urbanization remains underexplored. this study applies international trade theory to explore the causal effects and supplements panel data on 216 economies from 1990 to 2018 using two-stage least squares regression (2sls). the results show that both cereal exports and imports significantly promote urbanization, with the magnitude of imports being higher than that of exports. Furthermore, global cereal trade promotes urbanization in both emerging and developed economies. the findings provide insights for policymakers on how to leverage adjustments in cereal trade policies to enhance urbanization, particularly in economies striving to balance food security with urban development. PUBLIC INTEREST STATEMENT this study explores how the trade of cereals – such as wheat and rice – affects the growth of cities worldwide. By examining data from 216 countries over nearly three decades, we discovered that countries that export or import cereals tend to see more urban development. the impact of importing cereals on city growth is even stronger than that of exporting them. this finding is crucial for countries looking to balance their food needs with urban expansion. it suggests that managing the cereal trade can be a strategy to enhance urbanization while ensuring food security. Our research provides a fresh perspective on the global discussion about how trade policies can influence the development of urban areas, offering insights for policymakers on fostering sustainable cities. 1. Introduction throughout history and into the era of globalization, cereal trade has consistently been a crucial driver in evolving international trade patterns and the development of urban landscapes (Federico, 2005; huang et al., 1999; O’Rourke & Williamson, 2002; swinnen & squicciarini, 2012). cereals, as a primary food source, play a strategic role in national food security and have unique market characteristics due to their seasonal variability and essential demand. Researchers investigated the nexus between cereal imports and urbanization in developing economies (Zhang & Wan, 2015, 2017); however, there is limited empirical evidence on whether global cereal trade influences urbanization. therefore, this study empirically investigates the impact of cereal trade on urbanization across developed and emerging economies. the rapid growth of global cereal trade since 1990, from 250 million tons in 2000 to over 500 million tons by 2019, as reported by the United nations (Un) report on world food security and nutrition (United nations, 2019), underscores the increasing interconnectivity of cereal markets worldwide. this expansion coincides with a significant urban shift, where the proportion of the world’s urban population has increased from approximately 30% in the last century to 56.15% in 2020 and is expected to reach 62.5% by 2035. north america and latin america are the largest net cereal exporters; europe is a net exporter; and asia and africa are the largest net importers (World Bank, 2018). the correlation between the © 2024 the author(s). Published by informa uK Limited, trading as taylor & Francis group CONTACT Lijuan Yang [email protected].cn school of economics, Lanzhou university, Lanzhou, China . https://doi.org/10.1080/23311975.2024.2375997 this is an open access article distributed under the terms of the Creative Commons attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. the terms on which this article has been published allow the posting of the accepted Manuscript in a repository by the author(s) or with their consent. ARTICLE HISTORY Received 28 March 2022 Revised 19 February 2024 accepted 1 July 2024 KEYWORDS cereal exports; cereal imports; urbanization, food security, emerging economies REVIEWING EDITOR huifen (helen) cai, Middlesex University Business school, United Kingdom SUBJECTS international trade (incl. trade agreements & tariffs); Development economics; Urban economics 2l. Yang increasing cereal trade and urbanization trends prompts a crucial inquiry into the impacts of cereal trade on urbanization. this study aims to uncover whether and how cereal trade acts as a catalyst or barrier to urbanization, focusing on the differential effects of cereal exports and imports. Based on the classical theory of international trade, it analyzes the effects of cereal exports and imports on urbanization using transnational panel data on 216 economies from 1990 to 2018. the results indicate that the impact of cereal exports and imports on urbanization is heterogeneous. global cereal trade promotes urbanization, while the magnitude of imports is higher than that of exports. Moreover, cereal trade accelerates the urbanization of both developed and emerging economies. the contributions of the study are 3-fold. First, it expands the understanding of trade-urbanization dynamics. By dissecting the heterogeneous impacts of cereal trade (exports and imports) on urbanization, this study enriches the theoretical analysis of the effects of international trade on regional development. second, it deepens the empirical analysis of the spatial dimensions of trade liberalization (Brülhart, 2011; hirte etal., 2020) with global data. leveraging a comprehensive panel dataset, this study offers robust empirical evidence on the differential impacts of cereal exports and imports on urbanization across both developed and emerging economies. third, it informs policy design for sustainable urban development. the study’s findings have implications for policymakers worldwide, offering evidence-based insights to inform the development of integrated trade, food security and urbanization strategies, particularly for emerging economies, to fuel urban development and enhance overall economic resilience. the remainder of this article is organized as follows: section 2 reviews the literature. section 3 presents the theoretical framework. sections 4 and 5 discuss the methodology and results. section 6 provides a case analysis of the urbanization level between a cereal exporter (Usa) and two cereal importers (china and india). section 7 concludes the article. 2. Literature review 2.1. Theoretical analysis linking international trade and urban development Urban system and new economy theories offer frameworks linking international trade to urban development, influenced by economic, demographic and geographic factors. Rosen and Resnick (1980) and Wheaton and shishido (1981) focus on the foundational role of these conditions in urban development. in their seminal work, Fujita et al. (1999) hypothesized that trade influences urban systems’ evolution, with cities developing hierarchically based on comparative advantages and economies of scale in trade. these theories underscore the role of trade in urban architecture, suggesting that trade fuels the expansion of existing urban areas and catalyzes the emergence of new urban centers in strategically advantageous locations, thus reshaping the urban landscape in response to evolving trade. Rural labor migration theory also offers a theoretical foundation for examining the nexus between trade and urbanization. this framework suggests that disparities in income and employment between rural and urban areas can catalyze a migration flow, particularly when trade policies and international market dynamics are introduced (harris & todaro, 1970; lewis, 1954; todaro, 1969). Petrakos (1989) extends this theory to a global context, where the economic shifts due to trade can spur rural-to-urban labor movements. these movements are magnified in emerging economies where trade developments, including technological advancements in cereal production, lead to an inevitable redistribution of labor toward urban centers. this analysis connects trade-related economic changes to urban migration trends, showing how specific trade policies and global market shifts drive labor flows from rural areas to cities, thereby shaping urban growth through the lens of international commerce. 2.2. Empirical evidence for the effects of trade on urban development empirical studies grounded in urban systems and new economy theories present findings on the effect of trade liberalization on urban development. While ades and glaeser (1995) have empirically supported the growth of central cities in open economies due to trade, Brülhart (2011) and Davis and henderson cOgent BUsiness & ManageMent 3 (2003) indicate that the overall promotion of urbanization through trade liberalization is still debated. Krugman and elizondo (1996) argue that without international trade, industrial concentration can lead to the development of large cities due to economies of scale. however, they also suggest that the advent of trade can diffuse this concentration by redistributing activities to locations with trade cost advantages. coşar and Fajgelbaum (2016) find that trade openings increase the spatial concentration of cities with foreign trade cost advantages, especially coastal cities. Moomaw and shatter (1996) contribute to this discourse by demonstrating that export-oriented policies can be potent drivers of urbanization. hirte etal. (2020) demonstrate how trade cost heterogeneity within a country can intensify regional economic disparities, influencing urbanization in multifaceted ways. this evidence suggests trade policy influences urbanization, with the potential to centralize and decentralize urban growth depending on the structure and management of trade costs within national and global contexts. Furthermore, trade policies have asymmetric effects in emerging economies (Udeagha & ngepah, 2021). Drawing from rural labor migration theory, empirical evidence suggests that trade openness impacts urbanization, particularly through its influence on the sectoral makeup of economies (Davis & henderson, 2003). net cereal imports increased the level of urbanization in asian emerging economies (Zhang & Wan, 2015), which can import cereal to promote urbanization (Zhang & Wan, 2017). the effects of maize on china’s urbanization were not pronounced (chen & Kung, 2016). taking china as an example, exports have significant impacts on the urbanization of china’s coastal area (chen & Wu, 2017). since china’s reform and opening up and its entry into the World trade Organization (WtO), the growth of imports of agricultural products has depressed rural income, and the expansion of exports of labor-intensive products has increased urban wages and promoted the migration of the labor force and urbanization (gu etal., 2017; Zhang & song, 2003). these empirical studies demonstrate the significant role of agricultural trade in transforming economic sectors and influencing labor distribution, thereby contributing to the urbanization trends observed in emerging asian economies. historical evidence underscores the role of the cereal trade in urban development across continents. the fundamental necessity of cereal abundance for city formation has been documented, with africa’s urbanization propelled by the allocation of surplus cereals to non-agricultural sectors (Walshaw, 2005) and urban growth linked to cereal exports (Jedwab, 2013). in europe, the Baltic grain trade facilitated urbanization by altering the regional labor division between eastern and western europe (hybel, 2002). heblich et al. (2022) demonstrate that the Repeal of the corn laws led to socio-economic shifts in england and Wales, including rural outmigration and structural transformation away from agriculture. this highlights the impacts of trade policies on urbanization and rural development. these historical instances provide valuable insights into the longstanding economic and societal impacts of the cereal trade on urban landscapes. historical studies indicate cereal trade as the cornerstone of urban expansion, where its abundance sustains city growth and initiates socio-economic transformations. this is observed in the case of the Repeal of the corn laws, which reshaped england’s rural and urban landscapes. 2.3. Literature gaps Despite the theoretical and empirical research, several gaps remain in addressing the heterogeneous impacts of cereal trade on urbanization, particularly through a global lens. First, within the frameworks of urban systems and new economy theories, an opportunity exists to investigate the varied impacts of various trade commodities and flows, particularly the specific effects of cereal exports versus imports on urbanization. there is also room for the enhancement of rural labor migration theory in exploring the interaction between trade policies and labor migration dynamics with urbanization in both developed and emerging economies. second, empirical studies have focused on emerging economies, with less attention paid to developed economies or a comparative analysis between the two. the effect of cereal exports and imports on urbanization needs further exploration. third, in historical analyses, while contributions have been made to understanding the historical role of cereal trade in urban development, research could bridge these insights with the contemporary globalized world. this advancement would inspire an integrated perspective on how cereal trade informs current urbanization trends and policymaking. therefore, this study aims to establish a theoretical framework and provide empirical evidence from a global dataset of cereal trade and urbanization. 4l. Yang 3.Theoretical framework By referring to the analysis framework (hirte et al., 2020; Petrakos, 1989) and the modeling ideas for cereal trade and urbanization (harris & todaro, 1970; Zhang & Wan, 2015), this study applies a classical international theory, that is, comparative advantage and resource endowment theories, to investigate the impact of cereal trade on urbanization. classical international trade theory holds that labor and land are integral factors in cereal production. generally, a country has a high efficiency in producing products with relatively abundant resources. therefore, economies with a high supply of labor and cultivated land engaged in cereal production have a comparative advantage in cereal production. Domestic cereal production depends on the scale of the labor force engaged in production and the cultivated land area. the scale of cereal production is a prerequisite for the cereal trade. economies with a comparative advantage in cereal production will export cereal and benefit from trade. the labor force engaged in agricultural production is concentrated in rural areas for cereal production. the more the labor force is engaged in rural cereal production, the lower the amount of labor force entering cities for employment and the more limited the process of urbanization. simultaneously, the larger the area of cultivated land, the more negatively it will affect the space required for urban development. a cereal-exporting country can reap the benefits of international trade. however, a country exporting cereal to the international market also means that the country bears the pressure of cereal production to meet the needs of the international cereal market. the country must ensure that a sufficient scale of the labor force is engaged in cereal production and that there is sufficient cultivated land area to ensure cereal production. a country exports cereal when its domestic cereal supply relative to domestic demand is abundant, whereas it imports cereal when the domestic demand for cereal cannot be met. a precondition for ensuring an adequate supply is sufficient cultivated land and a labor force specializing in cereal production. Urbanization is the process by which people originally engaged in agricultural production move from rural areas to cities for employment. theoretically, the cereal trade will impact urbanization. cereal production is the basic guarantee of a country’s economic and social development; a country will not completely give up cereal production. however, if the domestic cereal supply is insufficient, economies without a comparative advantage in cereal production will import cereal. thus, when the scale of domestic cereal production is small, agricultural productivity is not high and the area of cultivated land is limited, a country’s cereal demand can be met through the world cereal market. cereal imports relax the constraints on the scale of the domestic labor force engaged in cereal production and the area of cultivated land for cereal production, which is conducive to promoting urbanization. however, the increase in cereal imports makes a country more dependent on foreign cereal and the rising risk of food security negatively impacts urbanization. the overall effect of cereal imports and exports on urbanization depends on the balance of positive and negative influences (see table 1). the cereal trade’s effects on urbanization are as follows: cereal exports benefit from trade and accelerate urbanization. cereal imports reduce domestic cereal production and accelerate urbanization. however, the increase in domestic cereal production demand caused by cereal exports reduces cereal-exporting countries’ urbanization. this is because, to export cereal, the country has to make sure there is a labor force in rural areas and cultivated land; an increasing labor force in rural areas and cultivated land will reduce its urbanization. Moreover, the increase in food Table 1. effects of cereal exports and imports on urbanization. Cereal trade Reason impact on urbanization in Developed economies impact on urbanization in emerging economies exports Domestic cereal production is sufficient Positive: gain trade benefits and accelerate urbanization negative: Pressure to sustain exports limit urban growth negative: High productivity reduces urban labor demand Positive: exports fund urban infrastructure and services imports Domestic cereal production is insufficient Positive: Reduces pressure on domestic production, fostering urban activities Positive: supports urbanization by meeting urban food demand negative: Leads to dependency and economic vulnerability negative: Potential for increased food security risks Data Source: Prepared by the author. cOgent BUsiness & ManageMent 5 security risk caused by cereal imports reduces urbanization. specifically, cereal exports can stimulate economic benefits and urban growth but may also intensify rural–urban disparities. conversely, imports might prompt urban expansion by reducing the demand for domestic cereal production; nonetheless, they risk food security and rural livelihoods. therefore, this study hypothesizes that cereal exports and imports affect urbanization, and the impact is heterogeneous (see Figure 1). the distinct economic structures between developed and emerging economies shape the impact of cereal trade on urbanization. in developed nations, advanced agricultural technology and infrastructure support efficient cereal production for export without hampering urban labor markets, facilitating urban growth. For emerging economies, the reliance on cereal imports highlights the challenges of balancing agricultural productivity with urban food requirements, emphasizing the need for policies that enhance food security while promoting urban development. Furthermore, the dependence on cereal imports in emerging economies underscores the importance of global trade networks and the vulnerabilities associated with fluctuations in global cereal markets. 4. Methodology 4.1. Empirical methods Drawing from the literature (ades & glaeser, 1995; hirte et al., 2020; Zhang & Wan, 2015), this study constructs the following equation to investigate the impact of cereal trade on urbanization. the model integrates both macroeconomic indicators and sector-specific variables to capture the effects, highlighting the differential impacts of exports and imports on urbanization. ur anization trade x it i t it it it it b = + + + +∑ + δδδ α β ε , (1) where urbanizationit is measured by the proportion of urban population in the total population; and tradeit the model’s core explanatory variable, representing two dimensions of cereal trade: (1) the proportion of cereal exports to gDP, and (2) the proportion of cereal imports to gDP, thus distinguishing the impact of cereal exports and imports on urbanization. ∑ x it represents control variables. the theoretical framework underpinning the selection of control variables draws upon a blend of urban system theory, new economy theories and rural labor migration theory. these theories collectively elucidate the multifaceted nature of urbanization, emphasizing the significance of economic growth, demographic shifts, agricultural productivity and land use patterns. the control variables were selected to account for these aspects, facilitating a comprehensive analysis of the cereal trade’s impact on urbanization. this approach ensures that the empirical model captures the complex interplay between trade, economic development and urban growth, thereby supporting the conditional independence assumption of the instrumental variable. therefore, following ades and glaeser Figure 1. effects of cereal trade on urbanization. 6l. Yang (1995), hirte etal. (2020) and Zhang and Wan (2015), this study utilizes per-capita gDP, total population, and the proportion of agriculture and industry to gDP as control variables. this study further utilizes a two-stage least-square regression, adding the control variables per-capita cereal output, proportion of arable land area to total land area and per-capita arable land area. Moreover, we control the country fixed effects ( δ i ), year fixed effects ( δ t ) and country–year fixed effects ( δ it ) . ε it is the random error term. 4.2. Data and variables this study utilizes data from 216 economies (see appendix 1) from 1990 to 2018.1 the statistics are obtained from the World Development indicators (WDi) database. tables 2 and 3 report the definitions, units and descriptive statistics of the variables. the selection of variables in this study was designed to reflect both the direct and indirect pathways through which cereal trade impacts urbanization. the primary variables of interest, cereal exports and imports, were selected to capture the essence of international trade dynamics relevant to urban development. control variables, including gDP per capita, total population, cereal output per capita and the proportion of agricultural land, were selected based on their theoretical and empirical relevance to urbanization processes. these variables are commonly Table 2. Data and definitions of variables. Category Variable Definition unit of variable Method of calculation Dependent variable urbanization urbanization % urban population/total population Core explanatory variables ex gdp _Cereal export dependence %Cereal exports/gDP im gdp _Cereal import dependence %Cereal imports/gDP Control variables logpergdp Per-capita gDP Constant price usD in 2010 gDP/total population logpopulation total population 1000 people total population of each country agri gdp _Proportion of agriculture in gDP % agriculture/gDP industry gdp _Proportion of industry in gDP % industry/gDP logavecereal Cereal production per capita Kilogram per hectare Cereal production/total population ar land _Proportion of arable land to total land %arable land area /land area logar per _Per-capita arable land area Hectare arable land area/total population ppdensity Population density Person/km2total population/land area developed Developed economy 0, 1 dummy according to World Bank classification landlocked inland country 0, 1 dummy no major river Table 3. Descriptive statistics of variables. Variable ob Mean std. Dev Min Max urbanization 6199 56.113 24.054 5.416 100.000 ex gdp _4267 25.935 26.327 0.000 99.940 im gdp _4261 14.192 7.596 0.362 62.416 pergdp 5597 13,525.120 20,916.850 164.337 195,879.600 population 6246 31,200 122,000 8.913 1,390,000 ppdensity 6159 256.3863 1220.242 0.136 19,196 avecereal 4915 2909.401 2416.331 34.300 28,130.100 ar land _5483 13.831 13.380 0.001 72.643 a r p e r_ 5475 0.218 0.274 0.000 2.807 agri gdp _5212 13.155 12.506 0.025 79.042 industry gdp _5168 26.968 12.513 2.073 87.797 developed 6255 0.167 0.373 0 1 landlocked 6264 0.199 0.399 0 1 Data Source: WDi. cOgent BUsiness & ManageMent 7 acknowledged in the literature as key factors influencing urban growth, economic development and the capacity of a country to engage in international trade. 4.3. Stylized facts some stylized facts about cereal trade and urbanization are reported in this subsection. Urbanization of the world’s cereal trading countries has shown differences, while generally, urbanization has increased. Urbanization of cereal exporters has increased from 1990 to 2018, but the range has been small. the largest range was in the United states, with an increase of 9.23% (from 75.3% in 1990 to 82.26% in 2018), whereas Russia had the smallest, with an increase of less than 1.5% (from 73.39% in 1990 to 74.43% in 2018). the urbanization of cereal importers has increased as well, especially in china, nigeria and Japan, with 2.24 times, 1.70 times and 1.18 times higher levels of urbanization than those in 1990, respectively (Figures 2 and 3). 5. Empirical results 5.1. Baseline regression table 4 displays the regression results.2 columns (1) to (6) control for country-fixed effects, year fixed effects and country–year fixed effects. columns (2) and (5) control for the ratio of agriculture to gDP, and columns (3) and (6) control for industry/gDP. Besides column (4), the coefficients of the proportion of cereal imports/gDP and the proportion of cereal exports/gDP in all regressions are positive and significant at the 1%–5% level, indicating that cereal exports and imports promote urbanization. combined with columns (3) and (6), the coefficients of the proportion of cereal imports/gDP are larger than that of cereal exports/gDP and are significant at 5%. By further comparing the variable coefficients in columns (3) and (6), we find that the coefficient of cereal exports/gDP is less than that of cereal imports/ gDP, indicating that both cereal exports and imports increase urbanization, with imports having a greater role. this conclusion is consistent with the theoretical analysis above. these results show that economies reap the trade benefits from cereal exports, thus promoting urbanization. these promoting effects of cereal exports on urbanization exceed the possible urbanization mitigation effect caused by the increase in domestic cereal production caused by cereal exports. cereal Figure 2. urbanization of the world’s seven major cereal exporters (1990–2018); unit: %. Source: World Bank World Development indicators Database. Note: Cereal trading economies are selected according to the Report on World Food security and nutrition, issued by the united nations in July 2019 (united nations, 2019). 14 l. Yang urbanization, where trade benefits bolster urban development without compromising food security. india’s position, balancing between export decreases and import increases, illustrates a transitional urbanization phase influenced by both domestic agricultural productivity and international trade dynamics. the findings from the case analyses resonate with the theoretical frameworks discussed in the literature review, particularly the urban system and new economy theories and rural labor migration theory. these theories propose that trade can catalyze urban development by reshaping economic structures and labor distribution. the empirical evidence confirms these propositions, demonstrating how cereal trade, through its complex interplay with economic development stages and agricultural productivity, distinctively shapes urbanization patterns across different countries. this direct application of theoretical insights to empirical data provides a concrete analysis of trade’s multifaceted impact on urban growth. the comparative case analysis offers valuable policy insights, particularly for emerging economies grappling with the challenges of urbanization and food security. By delineating the specific roles of cereal exports and imports in urban development, this study highlights the need for nuanced trade policies that consider both the direct and indirect effects of agricultural trade on urban growth. additionally, it opens avenues for future research to explore similar trade-urbanization dynamics in other commodities and regions, offering a template for assessing trade’s broader implications for urban development. 7. Conclusion 7.1. Major conclusions this study provides compelling evidence that cereal trade significantly influences global urbanization, with notable differences in the effects of exports versus imports. Our analysis demonstrates that, while both cereal exports and imports foster urban growth, the impact of imports on urbanization is more pronounced than that of exports. Furthermore, we uncover that the relationship between cereal trade and urbanization is complex and multifaceted across developed and emerging economies but consistently shows a positive correlation with urbanization rates. the findings highlight the critical role of agricultural land use efficiency in supporting urbanization, suggesting a pivotal area for policy intervention. 7.2. Policy suggestions (1) integrating urbanization into cereal trade policy frameworks. Policymakers should adopt a comprehensive approach that incorporates the dual objectives of promoting urban growth and ensuring food security in the development of cereal trade policies. this involves assessing the urbanization potential of cereal trade activities and aligning them with national urban development strategies. countries should establish multi-stakeholder platforms to ensure that trade policies are responsive to urbanization needs and challenges. (2) strengthening rural development and diversification. concerning the cOViD-19 pandemic’s impact on global cereal supply chains and its potential to slow urbanization processes, governments, particularly in emerging countries, should prioritize rural development initiatives. this includes investing in agricultural innovation and technology transfer to enhance productivity and resilience. additionally, policies should support rural diversification by promoting alternative employment opportunities beyond agriculture, such as in the light manufacturing sector, to reduce rural–urban migration pressures and foster balanced regional development. (3) support for cereal-exporting regions. For regions dependent on cereal exports, it is crucial to implement measures that protect rural livelihoods from the volatility of global markets. this may involve financial instruments such as price stabilization funds and insurance schemes against export income fluctuations. Furthermore, investing in sustainable agricultural practices and cOgent BUsiness & ManageMent 15 technologies can enhance the competitiveness of cereal exports while ensuring environmental conservation. (4) adapting to the impacts of cereal imports on urbanization. the finding that cereal imports have a more significant positive impact on urbanization than exports highlights the vulnerability of emerging countries to fluctuations in global cereal supply. to mitigate these risks, governments should focus on enhancing the domestic agricultural sector’s capacity through policy reforms and investments that encourage sustainable intensification and diversification of crop production. this strategy aims to reduce dependency on imports while supporting urban food security. (5) cross-sectoral coordination for comprehensive policymaking. effective policy responses require coordination across agricultural, trade, urban development and environmental sectors. By fostering cross-sectoral collaboration, governments can ensure that policies are synergistic and contribute to achieving sustainable urbanization, food security and economic development goals. 7.3. Limitations and directions for future research While this study has provided valuable insights into the impacts of cereal exports and imports on urbanization, it acknowledges certain limitations that offer avenues for future research. One limitation is the absence of an evaluative stance on whether the urbanization driven by the cereal trade is inherently positive or sustainable in the long term. Future studies could thus benefit from integrating sustainability assessments into the analysis, examining how urbanization influenced by cereal trade aligns with sustainable development goals. Moreover, as global trade and urbanization patterns evolve, specifically in the context of post-pandemic recovery, ongoing research should monitor these trends for emerging patterns, considering the potential for shifts in the trade-urbanization relationship over time. Notes 1. analyzing a broad spectrum of countries allows us to explore the impacts of cereal trade on urbanization, leveraging the largest available sample size in the database for comprehensive insights. 2. the model separation for imports and exports in this study is chosen to isolate the distinct effects each trade flow has on urbanization, reflecting the differences in their respective mechanisms. Finding additional instruments that meet the necessary exogeneity and relevance criteria is challenging owing to the intricate nature of global trade dynamics and the limited variables that exclusively affect one trade flow without influencing the other. By maintaining separate models, we ensure that the influences and policy implications of cereal exports and imports are not conflated, providing clearer insights into economic strategies in both developed and emerging economies. 3. Kleibergen Paaprk LM− tests the correlation between the instrumental variables and the endogenous variables. the null hypothesis is that the identification of the instrumental variables is insufficient. Kleibergen PaaprkWald F− tests whether the instruments are weakly identified. this test rejects the null hypothesis that the instruments are weakly identified. however, caution must be used in conducting this test in the presence of heteroscedasticity, autocorrelation, or clustering. in such a case, when the errors may not be i.i.d., as a rule of thumb, it is advisable to conclude that weak identification is not an issue if the F-statistic is at least 10 (see staiger & stock, 1997). HansenJ statistics test whether the instrumental variables are over-identified. if the value is zero, the model is identified. Both the weak instrumental variable test and the unrecognizable inspection are related to robustness checks in empirical research. these tests are crucial for validating the reliability and validity of the instrumental variables used in the analysis, ensuring that the instruments are appropriately strong and correctly identified, which directly impacts the robustness and credibility of the estimated effects in the study. 4. this stratification provides a methodological refinement, allowing for a targeted analysis of how cereal trade influences urbanization trends within distinct economic classifications, thus enhancing the robustness of the findings. 5. the dynamics of urbanization differ between developed and developing countries. Particularly, the percentage of urban population tends to be flat in currently developed countries, where it has resulted from an increase in agricultural productivity and structural change over the last centuries. conversely, booming urbanization in the global south tends to be associated with low agricultural productivity and rural poverty push factors. 16 l. Yang Disclosure statement none. Funding this work was supported by the national social science Fund of china, ‘Research on academic frontier theory and policy of the economics of standards’ [grant no. 21FJlB039]; the china association of trade in services, ‘Research on the impact of digital trade on manufacturing production efficiency’ [grant no. FWMYKt-202429]; and the gansu Provincial science and technology Program Fund, ‘Research on promoting trade development between gansu and countries along the silk Road through harmonization of standards’ [grant no. 23JRZa385]. About the author Lijuan Yang, associate professor, school of economics, lanzhou University, lanzhou, china. her research interests include international trade and the economics of standards. ORCID lijuan Yang http://orcid.org/0000-0003-2042-6431 Data availability statement the data are available from the author upon reasonable request. References ades, a., & glaeser, e. (1995). trade and circuses: explaining urban giants. The Quarterly Journal of Economics, 110(1), 1–19. https://doi.org/10.2307/2118515 Brülhart, M. (2011). the spatial effects of trade openness: a survey. Review of World Economics, 147(1), 59–83. https:// doi.org/10.1007/s10290-010-0083-5 chen, c., & Wu, Y. (2017). impact of foreign direct investment and export on urbanization: evidence from china. China & World Economy, 25(1), 71–89. https://doi.org/10.1111/cwe.12187 chen, s., & Kung, J. K. (2016). Of maize and men: the effect of a new World crop on population and economic growth in china. 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Retrieved March 8, 2017, from https://papers.ssrn.com/sol3/papers.cfm?abstract_ id=2928701. Appendix 1: Sample economies in the world Emerging economies: afghanistan; albania; algeria; american samoa; andorra; angola; antigua and Barbuda; aruba; azerbaijan; arab World; argentina; armenia; Bahamas; Bahrain; Bangladesh; Barbados; Belarus; Belize; Benin; Bermuda; Bhutan; Bolivia; Bosnia and herzegovina; Botswana; Brazil; British; Virgin islands; Brunei; Bulgaria; Burkina Faso; Burundi; cabo Verde; cambodia; cameroon; caribbean small states; cayman; central african; chad; channel islands; chile; china; colombia; comoros; congo, Dem. Rep.; congo, Rep.; costa Rica; cote d’ivoire; croatia; cuba; curacao; Djibouti; Dominica; Dominican Republic; ecuador; egypt; el salvador; equatorial guinea; eritrea; estonia; eswatini; ethiopia; Faroe islands; Fiji; French Polynesia; gabon; gambia; georgia; ghana; greenland; grenada; guam; guatemala; guinea; guinea-Bissau; guyana; haiti; honduras; hungary; india; indonesia; iran; iraq; isle of Man; Jamaica; Jordan; Kazakhstan; Kenya; Kiribati; Korea, Dem. People’s Rep.; Korea, Rep.; Kosovo; Kuwait; Kyrgyz; lao; lebanon; lesotho; liberia; libya; Madagascar; Malawi; Malaysia; Maldives; Mali; Marshall islands; Mauritania; Mauritius; Mexico; Micronesia; Moldova; Monaco; Mongolia; Montenegro; Mozambique; Myanmar; namibia; nauru; nepal; new caledonia; nicaragua; niger; nigeria; north Macedonia; northern Mariana islands; Oman; Pakistan; Palau; Panama; Papua new guinea; Paraguay; Peru; Philippines; Poland; Puerto Rico; Qatar; Romania; Russia; Rwanda; samoa; sao tome and Principe; saudi arabia; senegal; serbia; seychelles; sierra leone; sint Maarten; solomon islands; somalia; south africa; south sudan; sri lanka; st. Kitts and nevis; st. lucia; st. Martin; st. Vincent and the grenadines; sudan; suriname; sweden; 18 l. Yang syria; tajikistan; tanzania; thailand; timor-leste; togo; tonga; trinidad and tobago; tunisia; turkey; turkmenistan; turks and caicos islands; tuvalu; Uganda; Ukraine; United arab emirates; Uruguay; Uzbekistan; Vanuatu; Venezuela; Vietnam; Virgin islands; West Bank and gaza; Yemen; Zambia; Zimbabwe. Developed economies: austria; australia; Belgium; canada; cyprus; czech Republic; Denmark; Finland; France; germany; greece; iceland; ireland; israel; italy; Japan; latvia; liechtenstein; lithuania; luxembourg; Malta; Morocco; netherlands; new Zealand; norway; Portugal; san Marino; singapore; slovak; slovenia; spain; switzerland; United Kingdom; United states. Appendix 2: Figures 4–17 Figure 4. urbanization of China and usa (1990–2018); unit: %. Source: World Bank. Figure 5. total population of China and usa (1990–2018); unit: 1000 people. Source: World Bank. cOgent BUsiness & ManageMent 19 Figure 7. Proportion of cereal imports to gDP of China and usa (1990–2018); unit: %. Source: World Bank. Figure 8. Per-capita cereal output of China and the usa (1990–2018); unit: kilogram per hectare. Source: World Bank. Figure 6. Proportion of cereal exports to gDP of China and usa (1990–2018); unit: %. Source: World Bank. 20 l. Yang Figure 9. Proportion of cultivated land to total land of China and the usa (1990–2018); unit: %. Source: World Bank. Figure 10. Per-capita cultivated land of China and the usa (1990–2018); unit: hectare. Source: World Bank. cOgent BUsiness & ManageMent 21 Figure 11. urbanization of China and india (1990–2018); unit: %. Source: World Bank. Figure 12. total population of China and india (1990–2018) 1000 people. Source: World Bank. 22 l. Yang Figure 13. Proportion of cereal exports to gDP of China and india (1990–2018); unit: %. Source: World Bank. Figure 14. Proportion of cereal imports to gDP of China and india (1990–2018); unit: %. Source: World Bank. cOgent BUsiness & ManageMent 23 Figure 15. Per-capita cereal output of China and india (1990–2018); unit: kilogram per hectare. Source: World Bank. Figure 16. Proportion of cultivated land to total land area of China and india (1990–2018); unit: %. Source: World Bank.