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Do exporting firms benefit from retail internationalization? Evidence from France

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  • Angela Cheptea
  • Charlotte Emlinger
  • Karine Latouche

Abstract

This paper questions the impact of the globalization of the retail sector on the export activity of origin country agrifood firms. In a previous paper (Cheptea et al. 2015), we showed that the overseas expansion of a country's retailers fostered its exports to foreign markets. This effect can be explained by a reduction in trade costs for retailers' supplying firms in the origin country, or to a change in consumer preferences in the host country that benefits all origin country firms. In this paper, we evaluate which of the two mechanisms dominates. For that, we use an original firm-level database of French agri-food exports, identifying the domestic suppliers of French retailers through certification with the private IFS standard. We find that IFS certified French firms are more likely to export and export larger volumes than non-certified firms to markets where French retailers established outlets. We also show that when French retailers close down their activities in a market, IFS firms face a drop in exports to this market in the subsequent years. The results are robust to the use of different sets of firm- and country-specific fixed effects, are unaffected by possible selection and endogeneity biases, and by the presence in export markets of other retailers. The difference in behavior for certified and non-certified exporting firms on markets where French retailers operate confirms the trade cost advantage of retailers' suppliers, which is lost when French retailers exit from the destination country.

Suggested Citation

  • Angela Cheptea & Charlotte Emlinger & Karine Latouche, 2015. "Do exporting firms benefit from retail internationalization? Evidence from France," Working Papers 2015-21, CEPII research center.
  • Handle: RePEc:cii:cepidt:2015-21
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    References listed on IDEAS

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    1. Raff, Horst & Schmitt, Nicolas, 2015. "Retailing and international trade: A survey of the literature," Economics Working Papers 2015-02, Christian-Albrechts-University of Kiel, Department of Economics.
    2. Matthieu Crozet & Keith Head & Thierry Mayer, 2012. "Quality Sorting and Trade: Firm-level Evidence for French Wine," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 609-644.
    3. Eaton, Jonathan & Kortum, Samuel, 2001. "Trade in capital goods," European Economic Review, Elsevier, vol. 45(7), pages 1195-1235.
    4. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-1721, September.
    5. Angela Cheptea & Charlotte Emlinger & Karine Latouche, 2012. "Multinational Retailers and Home Country Exports," Post-Print hal-01208840, HAL.
    6. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    7. Andrew B. Bernard & J. Bradford Jensen, 2004. "Why Some Firms Export," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 561-569, May.
    8. Ahn, JaeBin & Khandelwal, Amit K. & Wei, Shang-Jin, 2011. "The role of intermediaries in facilitating trade," Journal of International Economics, Elsevier, vol. 84(1), pages 73-85, May.
    9. Marc J. Melitz & Gianmarco I. P. Ottaviano, 2008. "Market Size, Trade, and Productivity (DOI:10.111/j.1467-937x.2007.00463.x)," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 985-985.
    10. Eaton, Jonathan & Kortum, Samuel, 2001. "Technology, trade, and growth: A unified framework," European Economic Review, Elsevier, vol. 45(4-6), pages 742-755, May.
    11. Marc J. Melitz & Gianmarco I. P. Ottaviano, 2008. "Market Size, Trade, and Productivity," Review of Economic Studies, Oxford University Press, vol. 75(1), pages 295-316.
    12. John A. Dawson, 2007. "Scoping and conceptualising retailer internationalisation," Journal of Economic Geography, Oxford University Press, vol. 7(4), pages 373-397, July.
    13. Thomas Reardon & C. Peter Timmer & Christopher B. Barrett & Julio Berdegué, 2003. "The Rise of Supermarkets in Africa, Asia, and Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1140-1146.
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    17. Karine Latouche & Emmanuelle Chevassus-Lozza, 2015. "Retailer Supply Chain and Market Access: Evidence From French Agri-food Firms Certified with Private Standards," The World Economy, Wiley Blackwell, vol. 38(8), pages 1312-1334, August.
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    Cited by:

    1. repec:eee:inecon:v:112:y:2018:i:c:p:1-12 is not listed on IDEAS
    2. Charlotte Emlinger & Sandra Poncet, 2016. "With a Little Help from My Friends: Multinational Retailers and China's consumer Market Penetration," Working Papers 2016-01, CEPII research center.

    More about this item

    Keywords

    Multinational retailers; Firm-level exports; Private standards;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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