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

Liliana Foletti and Anirudh Shingal

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Sanitary and Phytosanitary Measures; MRLs; Regulation; Heterogeneity; Trade (search for similar items in EconPapers)
JEL-codes: F13 F14 I18 (search for similar items in EconPapers)
Date: 2014-10-01
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (8)

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Working Paper: Stricter regulation boosts exports: the case of Maximum Residue Levels in pesticides (2014)
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