Exports and governance: the role of private voluntary standards
Dela-Dem Doe Fiankor,
Inmaculada Martínez-Zarzoso and
No 275059, GlobalFood Discussion Papers from Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development
The empirical evidence that institutional diﬀerences across countries aﬀect bilateral trade is robust. The crucial question remains how countries can enhance trade amid these differences. In this paper, we measure the degree to which governance and institutions diﬀer between countries as “governance distance”. Using a sample of EU/EFTA imports, we examine how the adoption of private food standards and certiﬁcations modify the eﬀect of governance distance on exports within a structural gravity framework. Our results show that while increasing governance distance hinders bilateral trade, the interaction of standards and the governance distance is positively associated with exports, hence partially oﬀsetting their direct trade–inhibiting eﬀects. GlobalGAP certiﬁed countries see the trade-inhibiting eﬀects of governance distance on their exports reduced by about 50%, ceteris paribus.
Keywords: Agribusiness; Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety; International Development; International Relations/Trade (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:gagfdp:275059
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