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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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  • Cadot, Olivier & Jaud, Mélise & Suwa Eisenmann, Akiko, 2009. "Do Food Scares Explain Supplier Concentration? An Analysis of EU Agri-food Imports," CEPR Discussion Papers 7431, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:7431
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    Cited by:

    1. Xiong, Bo, 2016. "Food safety and food imports in Europe: the risk of aflatoxins in pistachios," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 20(1), September.
    2. Lorena Tudela-Marco & Jose Maria Garcia-Alvarez-Coque & Luisa Martí-Selva, 2017. "Do EU Member States Apply Food Standards Uniformly? A Look at Fruit and Vegetable Safety Notifications," Journal of Common Market Studies, Wiley Blackwell, vol. 55(2), pages 387-405, March.
    3. Lei, Lei & Zhou, Li, 2017. "Avian influenza, nontariff measures, and the poultry exports in the global value chain," IDE Discussion Papers 640, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Beestermöller, Matthias & Disdier, Anne-Célia & Fontagné, Lionel, 2018. "Impact of European food safety border inspections on agri-food exports: Evidence from Chinese firms," China Economic Review, Elsevier, vol. 48(C), pages 66-82.
    5. Melise Jaud & Madina Kukenova & Martin Strieborny, 2015. "Financial Development and Sustainable Exports: Evidence from Firm-product Data," The World Economy, Wiley Blackwell, vol. 38(7), pages 1090-1114, July.
    6. Marie-Agnès Jouanjean & Jean-Christophe Maur & Ben Shepherd, 2011. "Reputation Matters: Spillover Effects in the Enforcement of US SPS Measures," LICOS Discussion Papers 30211, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    7. Paul Brenton & Olivier Cadot & Martha Denisse Pierola, 2012. "Pathways to African Export Sustainability," World Bank Publications, The World Bank, number 9380, December.
    8. Maria MASOOD, 2014. "New Evidence on Development and Cultural Trade: Diversification, Reconcentration and Domination," Working Papers P85, FERDI.
    9. Taghouti, Ibtissem & Martinez-Gomez, Victor & Coque, José María Garcia Alvarez, 2015. "Exploring Eu Food Safety Notifications On Agro-Food Imports: Are Mediterranean Partner Countries Discriminated?," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3(2), pages 1-15, April.
    10. Alia, Didier Y. & Zheng, Yuqing & Kusunose, Yoko & Reed, Michael R., 2017. "Trade effects of food regulations and standards: Assessing the impact of SPS measures on market structure," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258368, Agricultural and Applied Economics Association.
    11. Masood, Maria, 2019. "New evidence on income and the geographical distribution of imports: The case of audiovisuals," Journal of Comparative Economics, Elsevier, vol. 47(3), pages 717-734.
    12. Jose‐Maria Garcia‐Alvarez‐Coque & Ibtissem Taghouti & Victor Martinez‐Gomez, 2020. "Changes in Aflatoxin Standards: Implications for EU Border Controls of Nut Imports," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(3), pages 524-541, September.
    13. Taghouti, Ibtissem & Martinez-Gomez, Victor & Marti, Luisa, 2017. "Sanitary and Phytosanitary measures in agri-food imports from the European Union: Reputation effects over time," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 16(02), January.

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    More about this item

    Keywords

    agricultural trade; European Union; food; import concentration; sanitary risk;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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