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Impact of European food safety border inspections on agri-food exports: Evidence from Chinese firms

Author

Listed:
  • Beestermöller, Matthias
  • Disdier, Anne-Celia
  • Fontagne, Lionel

Abstract

The cost of complying with a sanitary standard is certain. However, such measure introduces uncertainty for exporters 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. 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. 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 exporters and resulting in a concentration of Chinese exports among big exporters.

Suggested Citation

  • Beestermöller, Matthias & Disdier, Anne-Celia & Fontagne, Lionel, 2018. "Impact of European food safety border inspections on agri-food exports: Evidence from Chinese firms," Munich Reprints in Economics 62824, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:62824
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    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; Animal Welfare Policy

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