Disentangling demand-enhancing and trade-cost effects of maximum residue regulations

Bo Xiong, John Beghin

Research output: Contribution to journalArticlepeer-review

69 Scopus citations

Abstract

Maximum residue level (MRL) regulations in plant products can create unnecessary trade barriers on one hand and enhance demand via risk mitigation or quality assurance on the other. We stipulate a generalized gravity equation model to disentangle the effects of MRLs on the import demand and foreign exporters' supply. Applying the framework to the MRLs on pesticides imposed by high-income Organization for Economic Co-operation and Development countries, we find that the MRLs jointly enhance the import demand and hinder foreign exporters' supply. In addition, exporters from the less and least developed countries are more constrained by the MRLs than their competitors from the developed world.

Original languageEnglish (US)
Pages (from-to)1190-1203
Number of pages14
JournalEconomic Inquiry
Volume52
Issue number3
DOIs
StatePublished - Jul 2014
Externally publishedYes

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Economics and Econometrics

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