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Impact of European Food Safety Border Inspections on Agri-Food Exports: Evidence from Chinese Firms

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  • Lionel Fontagné
  • Anne-Célia Disdier
  • Matthias Beestermöller

Abstract

The cost of complying with a sanitary standard is certain. However, such regulatory measure introduces an element of uncertainty for exporting firms in relation to border rejections. Shipments may fail to pass inspections and may be refused entry into the importing country. This risk is shaped by variance in the quality of the exported product, and the stringency of the border controls. Large developing countries are over-represented in import refusals and may be targeted by inspectors. We examine how the risk of rejection at European borders on safety grounds is affecting Chinese agri-food exporters. We combine information from the European Rapid Alert System for Food and Feed with Chinese firm-level export data by product, destination and year for the period 2000-2011. We show that information externalities and reputation effects are important. Border rejections amplify the turnover among firms at the extensive margin of trade. This risk is curbing small Chinese exporters and resulting in a concentration of Chinese exports from big and more productive exporters.

Suggested Citation

  • Lionel Fontagné & Anne-Célia Disdier & Matthias Beestermöller, 2016. "Impact of European Food Safety Border Inspections on Agri-Food Exports: Evidence from Chinese Firms," Working Papers 2016-04, CEPII research center.
  • Handle: RePEc:cii:cepidt:2016-04
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    Cited by:

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    2. Grundke, Robert & Moser, Christoph, 2019. "Hidden protectionism? Evidence from non-tariff barriers to trade in the United States," Journal of International Economics, Elsevier, vol. 117(C), pages 143-157.
    3. Klaus Gründler & Arye L. Hillman, 2021. "Ambiguous Protection," CESifo Working Paper Series 8888, CESifo.
    4. Lili Yan ING & Olivier CADOT, 2017. "Remaking Ad valorem equivalents of non-tariff measures in ASEAN," Working Papers DP-2017-09, Economic Research Institute for ASEAN and East Asia (ERIA).
    5. Liu, Qing & Ma, Hong, 2020. "Trade policy uncertainty and innovation: Firm level evidence from China’s WTO accession," Journal of International Economics, Elsevier, vol. 127(C).
    6. Xi He, 2020. "US agricultural exports and labor market adjustments," Agricultural Economics, International Association of Agricultural Economists, vol. 51(4), pages 609-621, July.
    7. Fiankor, Dela-Dem Doe & Ehrich, Malte & Brümmer, Bernhard, 2016. "EU-African Regional Trade Agreements as a Development Tool to Reduce EU Border Rejections," GlobalFood Discussion Papers 244352, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.

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    More about this item

    Keywords

    Food Safety; Border Inspections; Import Refusals; Uncertainty; Firm Heterogeneity;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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