Publications

Markups and export behavior: Firm-level evidence from the French food processing industry

Yaghoob Jafari, Maximilian Koppenberg, Stefan Hirsch, Thomas Heckelei

American Journal of Agricultural Economics

First published: 24 January 2022

https://doi.org/10.1111/ajae.12292

Abstract

The relationship between a firm’s markups and its export behavior is highly relevant to individual firms’ strategic decisions as well as to governments’ policies regarding competition. We investigate the impact of markups on firms’ decisions to export and resulting export intensity in the French food processing industry. Moreover, we assess the effect of entry into and remaining in the export market on firms’ markups and evaluate differences in markups between exporters and non-exporters. Our results suggest that higher markups lead to both increased participation in the export market and greater export intensity. In addition, we find that firms obtain higher markups by entering and remaining in the export market. Finally, our results suggest that exporters generate higher markups, on average, than non-exporters. Similar results are found when controlling for differences in firms’ productivity. Our findings suggest that trade policies designed to increase firms’ participation in export markets, such as limits to border restrictions, may counteract domestic competition policies targeted at price–cost margins.

The AfCFTA impact on agricultural and food trade: a value added perspective

Ilaria Fusacchia, Jean Balié, Luca Salvatici

European Review of Agricultural Economics, Volume 49, Issue 1, January 2022, Pages 237–284,
https://doi.org/10.1093/erae/jbab046
Published: 18 October 2021

Abstract

The African Continental Free Trade Area agreement will create the largest single market in the world in terms of the number of countries and people. We analyse the effects of regional trade liberalisation on production fragmentation and networks using a global computable general equilibrium model adapted to take into account the value-added structure of international trade. This permits the analysis of the impact of trade policies in the presence of global upstream and downstream linkages through a counterfactual analysis. The analysis goes beyond previous studies by focusing on member countries’ agricultural and food integration in regional and global value chains through backward and forward linkages. Our simulation results suggest that the agreement could have a significant impact on trade patterns in terms of value-added structure and extra- or intra-regional destinations.

The reduction in trade costs within the region has a higher incidence on agriculture and food backward intra-regional integration than on forward participation, but this pattern varies substantially across countries. We find that the continental agreement translates in more widely spread benefits across sectors if we consider the income generated within each sector (value added) rather than simply accounting for gross exports.

Geographical indications and trade:
Firm-level evidence from the French cheese industry

Sabine Duvaleix, Charlotte Emlinger, Carl Gaigné, Karine Latouche

Food Policy – Volume 102, July 2021

Highlights

♦ Investigation of the effect of GI on perceived quality, prices and trade margins.

♦ Use of firm-product data of to identify PDO trade flows of French cheeses and butters.

♦ PDO label benefits from a price premium and is perceived as a quality signal.

♦ The role of the demand effect for PDO varieties is confirmed.

♦ GI have a positive effect on market access to some markets (EU or with a similar GI policy).

Abstract

The protection of geographical indications is now an important feature of trade agreements. In this paper, we examine whether geographical indications are valued by foreign consumers and whether they have implications for trade at firm level. We use firm-product level data from French Customs and a unique dataset of firms and products concerned by Protected Designations of Origin (PDO) in the cheese and butter sector. Our estimations show that PDO varieties are perceived by consumers as varieties of higher quality than non-PDO varieties and that the prices of PDO varieties are 11.5% higher than those of non-PDO. Firms producing PDO varieties do not export higher volumes, but benefit from a better access to European markets and to countries with a similar policy about geographical indications. The inclusion of some GI varieties in trade agreements may thus constitute an opportunity for PDO producers to increase their market access. 

Keywords: Geographical indications, PDO cheeses, Export performance, Product quality, Trade margins

JEL: F10, F14

https://doi.org/10.1016/j.foodpol.2021.102118