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Quality Labels and Firm Survival in the Food Industry

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  • Bontemps, Christophe
  • Bouamra-Mechemache, Zohra
  • Simioni, Michel

Abstract

Both industry and firm characteristics influence the survival of a firm in an industry over time. Aging, size, structure are factors often discussed in the literature, but public intervention effects - through public quality labeling for example - may also have an effect that is examined here. We use data on French firms producing cheese under public quality label or not over the period 1990-2006. We perform a nonparametric estimation using Kaplan-Meier estimators as well as proportional hazard rate models to assess the impact of such factors on firms survival. Our results confirm existing finding on firm survival determinants. We also shed light on the effect of public intervention into that industry. More precisely, our focus on public quality labeling in the French cheese industry shows that quality label reduces the risk of exiting for firms and more particularly for small firms. In other words, public intervention in this industry is well designed to increase the competitiveness of small firms enabling the coexistence on the market of both small and large firms.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114263.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:114263

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Keywords: Agribusiness;

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  1. Flora Bellone & Patrick Musso & Michel Quéré & Lionel Nesta, 2006. "Productivity and Market Selection of French Manufacturing Firms in the Nineties," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 319-349.
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  3. Hayes, Dermot J. & Lence, Sergio H., 2002. "Farmer-Owned Brands?," Staff General Research Papers 12707, Iowa State University, Department of Economics.
  4. Stéphan Marette & John Crespi, 2003. "Can Quality Certification Lead to Stable Cartels?," Review of Industrial Organization, Springer, vol. 23(1), pages 43-64, August.
  5. Sergio H. Lence & Stéphan Marette & Dermot J. Hayes & William Foster, 2007. "Collective Marketing Arrangements for Geographically Differentiated Agricultural Products: Welfare Impacts and Policy Implications," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 947-963.
  6. Kozo Kiyota & Miho Takizawa, 2007. "The Shadow of Death: Pre-exit Performance of Firms in Japan," Hi-Stat Discussion Paper Series d06-204, Institute of Economic Research, Hitotsubashi University.
  7. GianCarlo Moschini & Luisa Menapace & Daniel Pick, 2008. "Geographical Indications and the Competitive Provision of Quality in Agricultural Markets," Center for Agricultural and Rural Development (CARD) Publications 08-wp458, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  8. Miguel Manjón-Antolín & Josep-Maria Arauzo-Carod, 2008. "Firm survival: methods and evidence," Empirica, Springer, vol. 35(1), pages 1-24, March.
  9. Sophia Rabe-Hesketh & Anders Skrondal, 2012. "Multilevel and Longitudinal Modeling Using Stata, 3rd Edition," Stata Press books, StataCorp LP, edition 3, number mimus2, July.
  10. Lucia Foster & John Haltiwanger & Chad Syverson, 2005. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," Working Papers 05-11, Center for Economic Studies, U.S. Census Bureau.
  11. Nigel Key & Michael J. Roberts, 2006. "Government Payments and Farm Business Survival," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 382-392.
  12. Auriol, Emmanuelle & Schilizzi, Steven, 2000. "Quality Signaling through Certification," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123598, Australian Agricultural and Resource Economics Society.
  13. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Entry, Exit and Establishment Survival in UK Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 91-112, 03.
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