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Food Safety Regulation and Firm Productivity:Evidence from the French Food Industry

  • Bontemps, Christophe
  • Nauges, Céline
  • Réquillart, Vincent
  • Simioni, Michel

The purpose of this article is to assess whether food safety regulations imposed by the European Union in the 2000s may have induced a slow-down in the productivity of firms in the food processing sector. The impact of regulations on costs and productivity has seldom been studied. This article contributes to the literature by measuring productivity change using a panel of French food processing firms for the years 1996 to 2006. To do so, we develop an original iterative testing procedure based on the comparison of the distribution of efficiency scores of a set of firms. Our results confirm that productivity decreased in two major food processing sectors (poultry and cheese) at the time when safety regulation was reinforced.

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Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 696.

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Date of creation: Jan 2012
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Handle: RePEc:ide:wpaper:25480
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  1. Simar, L. & Wilson, P.W., 1998. "Productivity Growth in Industrialized Countries," Papers 9810, Catholique de Louvain - Institut de statistique.
  2. Bontemps, Christophe & Maigné, Elise & Réquillart, Vincent, 2010. "La productivité de l'agro-alimentaire français de 1996 à 2006," TSE Working Papers 10-143, Toulouse School of Economics (TSE).
  3. Steven Buccola & Fujii Yoko & Xia Yin, 2000. "Size and Productivity in the U.S. Milling and Baking Industries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 865-880.
  4. Wilson, Paul W, 1993. "Detecting Outliers in Deterministic Nonparametric Frontier Models with Multiple Outputs," Journal of Business & Economic Statistics, American Statistical Association, vol. 11(3), pages 319-23, July.
  5. Ambec, Stefan & Cohen, Mark & Elgie, Stewart & Lanoie, Paul, 2010. "The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?," LERNA Working Papers 10.14.320, LERNA, University of Toulouse.
  6. Tulkens, H. & Vanden Eeckaut, P., . "Non-frontier measures of efficiency, progress and regress for time series data," CORE Discussion Papers RP -1159, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Tristen Hayfield & Jeffrey S. Racine, . "Nonparametric Econometrics: The np Package," Journal of Statistical Software, American Statistical Association, vol. 27(i05).
  8. John M. Antle, 2000. "No Such Thing as a Free Safe Lunch: The Cost of Food Safety Regulation in the Meat Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 310-322.
  9. C.J. O'Donnell, 2008. "An aggregate quantity-price framework for measuring and Decomposing productivity and profitability change," CEPA Working Papers Series WP072008, School of Economics, University of Queensland, Australia.
  10. Leopold Simar & Valentin Zelenyuk, 2006. "On Testing Equality of Distributions of Technical Efficiency Scores," Econometric Reviews, Taylor & Francis Journals, vol. 25(4), pages 497-522.
  11. O'Donnell, Christopher J., 2010. "Measuring and decomposing agricultural productivity and profitability change," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), December.
  12. C.J. O’Donnell, 2011. "Econometric Estimation of Distance Functions and Associated Measures of Productivity and Efficiency Change," CEPA Working Papers Series WP012011, School of Economics, University of Queensland, Australia.
  13. Cuesta, Rafael A. & Lovell, C.A. Knox & Zofío, José L., 2009. "Environmental efficiency measurement with translog distance functions: A parametric approach," Ecological Economics, Elsevier, vol. 68(8-9), pages 2232-2242, June.
  14. Chaaban, Jad & Réquillart, Vincent & Trévisiol, Audrey, 2004. "The Role of Technical Efficiency in Takeovers: Evidence from the French Cheese Industry," IDEI Working Papers 330, Institut d'Économie Industrielle (IDEI), Toulouse.
  15. Paul Lanoie & Michel Patry & Richard Lajeunesse, 2008. "Environmental regulation and productivity: testing the porter hypothesis," Journal of Productivity Analysis, Springer, vol. 30(2), pages 121-128, October.
  16. Goodwin, Harold L., Jr. & Shiptsova, Rimma, 2000. "Welfare Losses From Food Safety Regulation In The Poultry Industry," Staff Papers 15780, University of Arkansas, Department of Agricultural Economics and Agribusiness.
  17. Christian Fischer & Sebastian Schornberg, 2007. "Assessing the competitiveness situation of EU food and drink manufacturing industries: An index-based approach," Agribusiness, John Wiley & Sons, Ltd., vol. 23(4), pages 473-495.
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