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Do Food Scares Explain Supplier Concentration? An Analysis of EU Agri-food Imports

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  • Cadot, Olivier
  • Jaud, Mélise
  • Suwa Eisenmann, Akiko

Abstract

This paper documents a decreasing trend in the geographical concentration of EU agro-food imports. Decomposing the concentration indices into intensive and extensive margins components, we find that the decrease in overall concentration indices results from two diverging trends: the pattern of trade diversifies at the extensive margin (EU countries have been sourcing their agri-food products from a wider range of suppliers), while geographical concentration increases at the intensive-margin (EU countries have concentrated their imports on a few major suppliers). This leads to an increasing inequality in market shares between a small group of large suppliers and a majority of small suppliers. We then move on to exploit a database of food alerts at the EU border that had never been exploited before. After coding it into HS8 categories, we regress the incidence of food alerts by product on determinants including exporter dummies as well as HS8 product dummies. Coefficients on product dummies provide unbiased estimates of the intrinsic vulnerability of exported products to food alerts, as measured at the EU border. We incorporate the product risk coefficient as an explanatory variable in a regression of geographical concentration and show that concentration is higher for risky products.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7431.

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Date of creation: Sep 2009
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Handle: RePEc:cpr:ceprdp:7431

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Keywords: agricultural trade; European Union; food; import concentration; sanitary risk;

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References

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  1. Olivier Cadot & Céline Carrere & Vanessa Strauss-Khan, 2011. "Export Diversification: What's behind the Hump?," Working Papers halshs-00553597, HAL.
  2. Amurgo-Pacheco, Alberto & Pierola, Martha Denisse, 2008. "Patterns of export diversification in developing countries : intensive and extensive margins," Policy Research Working Paper Series 4473, The World Bank.
  3. Ricardo Hausmann & Dani Rodrik, 2002. "Economic Development as Self-Discovery," NBER Working Papers 8952, National Bureau of Economic Research, Inc.
  4. Garcia Martinez, Marian & Poole, Nigel, 2004. "The development of private fresh produce safety standards: implications for developing Mediterranean exporting countries," Food Policy, Elsevier, vol. 29(3), pages 229-255, June.
  5. Jean Imbs & Romain Wacziarg, 2003. "Stages of Diversification," American Economic Review, American Economic Association, vol. 93(1), pages 63-86, March.
  6. Maskus, Keith E. & Otsuki, Tsunehiro & Wilson, John S., 2005. "The cost of compliance with product standards for firms in developing countries: an econometric study," Policy Research Working Paper Series 3590, The World Bank.
  7. Otsuki, Tsunehiro & Wilson, John S. & Sewadeh, Mirvat, 2001. "Saving two in a billion: : quantifying the trade effect of European food safety standards on African exports," Food Policy, Elsevier, vol. 26(5), pages 495-514, October.
  8. Lorenzo Cappellari & Stephen P. Jenkins, 2004. "Modelling Low Pay Transition Probabilities, Accounting for Panel Attrition, Non-Response, and Initial Conditions," CESifo Working Paper Series 1232, CESifo Group Munich.
  9. Jose Campa & Linda S. Goldberg, 1997. "The Evolving External Orientation of Manufacturing Industries: Evidence from Four Countries," NBER Working Papers 5919, National Bureau of Economic Research, Inc.
  10. Klinger, Bailey & Lederman, Daniel, 2004. "Discovery and development : an empricial exploration of"new"products," Policy Research Working Paper Series 3450, The World Bank.
  11. Paul Brenton & John Sheehy & Marc Vancauteren, 2001. "Technical Barriers to Trade in the European Union: Importance for Accession Countries," Journal of Common Market Studies, Wiley Blackwell, vol. 39(2), pages 265-284, 06.
  12. Tibor Besedes & Thomas J. Prusa, 2004. "Surviving the U.S. Import Market: The Role of Product Differentiation," NBER Working Papers 10319, National Bureau of Economic Research, Inc.
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Cited by:
  1. Paul Brenton & Olivier Cadot & Martha Denisse Pierola, 2012. "Pathways to African Export Sustainability," World Bank Publications, The World Bank, number 9380, January.
  2. Jaud, Melise & Kukenova, Madina & Strieborny, Martin, 2013. "Financial Development and Sustainable Exports: Evidence from Firm-Product Data," Working Papers 2013:14, Lund University, Department of Economics.
  3. Jouanjean, Marie-Agnes & Maur, Jean-Christophe, 2012. "Reputation matters : spillover effects in the enforcement of US SPS measures," Policy Research Working Paper Series 5935, The World Bank.
  4. Maria MASOOD, 2014. "New Evidence on Development and Cultural Trade: Diversification, Reconcentration and Domination," Working Papers P85, FERDI.

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