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Stricter regulation boosts exports: the case of Maximum Residue Levels in pesticides

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  • Foletti, Liliana
  • Shingal, Anirudh

Abstract

Constructing an original panel on Maximum Residue Levels (MRLs) in pesticides for 50 countries over 2006-2012, this paper studies the effect of heterogeneity in MRL regulation on bilateral trade. We find evidence of regulatory heterogeneity diminishing trade at the extensive margin when the exporter faces more stringent regulation abroad, suggesting compliance costs in entering the destination market. Significantly, however, we also find strong evidence of regulatory heterogeneity increasing trade at the intensive margin for exports coming from countries that set the strictest standards, alluding to the positive informative effect of such regulation.

Suggested Citation

  • Foletti, Liliana & Shingal, Anirudh, 2014. "Stricter regulation boosts exports: the case of Maximum Residue Levels in pesticides," MPRA Paper 59895, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:59895
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    Cited by:

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    3. David Karemera & Bo Xiong & Louis Whitesides, 2020. "A State‐Level Analysis of the Impact of a U.S.‐EU Harmonization of Food Safety Standards on U.S. Exports of Fruits and Vegetables," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(4), pages 856-869, December.
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    5. Tao, Hongjun & Luckstead, Jeff & Zhao, Liang & Xie, Chaoping, 2016. "Estimating Restrictiveness of SPS Measures for China's Dairy Imports," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(B), pages 1-24, August.
    6. Kareem, Olayinka Idowu, 2022. "Fruit safety regulations in the transatlantic region: How are Africa’s exports faring with the regulations?," Journal of Policy Modeling, Elsevier, vol. 44(5), pages 886-902.
    7. Hejazi, Mina & Grant, Jason H. & Peterson, Everett, 2016. "Hidden Trade Costs? Maximum Residue Limits and US Exports to Trans-Atlantic and Trans-Pacific Trading Partners," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235847, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Sanitary and Phytosanitary Measures; MRLs; Regulation; Heterogeneity; Trade;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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