From Border Checks to End-to-End Governance: Food-Safety Regulation and Firm-Level Export Responses

The expansion of international agri-food trade has increased the importance of product quality and safety in global markets. Because many safety and quality attributes are difficult to verify at the border, buyers and regulators often rely on collective reputation when assessing an origin’s reliability; consequently, noncompliance by a single exporter can impose reputational externalities on otherwise compliant firms from the same origin. These reputational externalities create incentives for exporting countries, especially those with large rural populations and strong reliance on agri-food exports, to strengthen domestic quality governance to align with evolving international standards and meet increasingly stringent market requirements. At the same time, stricter governance can raise compliance and production costs, making its net effect on export performance theoretically ambiguous. China—one of the world’s largest agri-food exporters and the largest developing economy—offers a useful context for assessing the trade effects of domestic quality governance. We use a staggered difference-in-differences design to assess how the EQSD program (the dummy variable) affects firms’ export dynamics. EQSD raises export values among incumbent exporters and increases the number of new exporters, with stronger effects for larger firms. Meanwhile, treated incumbents reduce the number of exported product varieties, consistent with greater specialization in core products rather than broad portfolio expansion. EQSD also strengthens compliance capacity: firms are more likely to obtain internationally recognized certifications (e.g., HACCP and ISO 22000), and these international certifications are followed by higher uptake of domestic certifications (e.g., green-product labels), consistent with learning-by-exporting.