Food Standards, Heterogeneous Firms and Developing Countries’ Export Performance

While recent studies emphasize the importance of firm heterogeneous effects in understanding international trade and its gains, these insights have largely been ignored in the literature on standards. In this paper we analyze how the adoption of private food standards by individual firms affects their export performance at the intensive and extensive margins of trade. We use unique 18-year panel data from 95 asparagus export firms in Peru and apply fixed effects and system GMM models. Results indicate that, when export persistence, unobserved heterogeneity and reversed causality are controlled for, certification to private standard schemes does not improve firms’ propensity to export, nor their export volumes and values. This insight puts doubt on the effectiveness of development programs to support developing country exporters to comply with private food standards in order to maintain or improve international market access.