Does trade openness contribute to food security? A dynamic panel analysis

- We examine the impact of trade openness on food security using panel data.
- System GMM approach is employed to account for unobserved heterogeneity and endogeneity.
- Trade openness exerts a positive and highly significant impact on food security.
- Economic growth and agricultural productivity improve food security.

Despite significant progress in the fight against hunger during the last decades, food insecurity remains a major problem in many countries, especially developing ones. In this study, we use a large cross-country data to investigate the impact of trade openness and other factors on food security, measured by dietary energy consumption. We employ a system GMM approach to account for unobserved heterogeneity, correlated individual effects and potential endogeneity of the explanatory variables. The empirical results reveal that trade openness and economic growth exert positive and significant impacts on dietary energy consumption, and also contribute to improvements in dietary diversity. The results are robust to the inclusion of additional variables capturing specific agro-climatic constraints (e.g. weather-related) and regional/country characteristics and to the sample composition. Most geographical regions are found to have significantly higher food security levels compared to Sub-Saharan Africa. Additional results indicate that besides calorie consumption, trade openness also improves dietary diversity and diet quality-related aspects of food security.