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The uneven spread of private food quality standards over time and space.

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CGIAR Research Program on Policies, Institutions, and Markets Workshop on Rural Transformation in the 21st Century (Vancouver, BC – 28 July 2018, 30th International Conference of Agricultural Economists). Presentation by Insa Flachsbarth (University of Göttingen, Germany), Nina Grassnick (University of Göttingen, Germany), Amjad Masood (Khwaja Fareed University of Engineering and Information Technology, Pakistan), Bernhard Brümmer (University of Göttingen, Germany).

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The uneven spread of private food quality standards over time and space.

  1. 1. The Uneven Spread of Private Food Quality Standards over Time and Space Insa Flachsbarth, Nina Grassnick, Amjad Masood, Bernhard Br¨ummer CGIAR Policies, Institutions and Markets Pre-Conference Workshop: Rural Transformation in the 21st Century: The Challenges of Low-Income, Late-Transforming Countries 28th July 2018
  2. 2. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Motivation 2 / 18
  3. 3. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Motivation Discerning consumers demand safe high-quality, sustainably and ‘ethically’ produced food + Strict public standards in major markets 2 / 18
  4. 4. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Motivation Discerning consumers demand safe high-quality, sustainably and ‘ethically’ produced food + Strict public standards in major markets ⇓ In global agricultural supply chains, standards must be fulfilled independent of origin of produce 2 / 18
  5. 5. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Motivation Discerning consumers demand safe high-quality, sustainably and ‘ethically’ produced food + Strict public standards in major markets ⇓ In global agricultural supply chains, standards must be fulfilled independent of origin of produce =⇒ Modernisation of procurement systems of agri-food companies and retail chains 2 / 18
  6. 6. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Motivation Discerning consumers demand safe high-quality, sustainably and ‘ethically’ produced food + Strict public standards in major markets ⇓ In global agricultural supply chains, standards must be fulfilled independent of origin of produce =⇒ Modernisation of procurement systems of agri-food companies and retail chains =⇒ Food quality standards ubiquitous in western markets (GlobalGAP membership of 30 European retail chains) 2 / 18
  7. 7. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Motivation Discerning consumers demand safe high-quality, sustainably and ‘ethically’ produced food + Strict public standards in major markets ⇓ In global agricultural supply chains, standards must be fulfilled independent of origin of produce =⇒ Modernisation of procurement systems of agri-food companies and retail chains =⇒ Food quality standards ubiquitous in western markets (GlobalGAP membership of 30 European retail chains) + Supermarket revolution in developing countries (GlobalGAP membership of 15 non-European retail chains) 2 / 18
  8. 8. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Motivation Discerning consumers demand safe high-quality, sustainably and ‘ethically’ produced food + Strict public standards in major markets ⇓ In global agricultural supply chains, standards must be fulfilled independent of origin of produce =⇒ Modernisation of procurement systems of agri-food companies and retail chains =⇒ Food quality standards ubiquitous in western markets (GlobalGAP membership of 30 European retail chains) + Supermarket revolution in developing countries (GlobalGAP membership of 15 non-European retail chains) ⇓ Demand for certified produce intensifies across the world in oligopsony market structures 2 / 18
  9. 9. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Motivation Discerning consumers demand safe high-quality, sustainably and ‘ethically’ produced food + Strict public standards in major markets ⇓ In global agricultural supply chains, standards must be fulfilled independent of origin of produce =⇒ Modernisation of procurement systems of agri-food companies and retail chains =⇒ Food quality standards ubiquitous in western markets (GlobalGAP membership of 30 European retail chains) + Supermarket revolution in developing countries (GlobalGAP membership of 15 non-European retail chains) ⇓ Demand for certified produce intensifies across the world in oligopsony market structures ⇒ Compliance by farmers becomes de facto mandatory for market participation, 2 / 18
  10. 10. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Motivation Discerning consumers demand safe high-quality, sustainably and ‘ethically’ produced food + Strict public standards in major markets ⇓ In global agricultural supply chains, standards must be fulfilled independent of origin of produce =⇒ Modernisation of procurement systems of agri-food companies and retail chains =⇒ Food quality standards ubiquitous in western markets (GlobalGAP membership of 30 European retail chains) + Supermarket revolution in developing countries (GlobalGAP membership of 15 non-European retail chains) ⇓ Demand for certified produce intensifies across the world in oligopsony market structures ⇒ Compliance by farmers becomes de facto mandatory for market participation, yet certification rates unequal around the world 2 / 18
  11. 11. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Motivation Discerning consumers demand safe high-quality, sustainably and ‘ethically’ produced food + Strict public standards in major markets ⇓ In global agricultural supply chains, standards must be fulfilled independent of origin of produce =⇒ Modernisation of procurement systems of agri-food companies and retail chains =⇒ Food quality standards ubiquitous in western markets (GlobalGAP membership of 30 European retail chains) + Supermarket revolution in developing countries (GlobalGAP membership of 15 non-European retail chains) ⇓ Demand for certified produce intensifies across the world in oligopsony market structures ⇒ Compliance by farmers becomes de facto mandatory for market participation, yet certification rates unequal around the world Why? 2 / 18
  12. 12. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix GlobalGAP Absolute change of F&V GlobalGAP certified producers (2008-2015) Absolute change (2008-2015) no certification ≤ -50 > -50 - (-1) no change > 0 - 6000 > 6000 - 12000 > 12000 Legend Source: Authors’ elaborations based on GlobalGAP Secretary Sample: 183 crop producing countries, 7 years, 111 countries certified in 2015 ⇒ 24 new countries certified in 2015 compared to 2008 and increase in certified areas in most countries 3 / 18
  13. 13. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Contribution to the literature and research questions 4 / 18
  14. 14. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Contribution to the literature and research questions Contribution to the literature 4 / 18
  15. 15. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Contribution to the literature and research questions Contribution to the literature • Lack of macro-studies for general conclusions 4 / 18
  16. 16. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Contribution to the literature and research questions Contribution to the literature • Lack of macro-studies for general conclusions • Lack of dynamic component of analysis due to missing panel data 4 / 18
  17. 17. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Contribution to the literature and research questions Contribution to the literature • Lack of macro-studies for general conclusions • Lack of dynamic component of analysis due to missing panel data • Lack of theoretical foundation 4 / 18
  18. 18. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Contribution to the literature and research questions Contribution to the literature • Lack of macro-studies for general conclusions • Lack of dynamic component of analysis due to missing panel data • Lack of theoretical foundation =⇒ Crucial to understand mechanisms! Research questions 4 / 18
  19. 19. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Contribution to the literature and research questions Contribution to the literature • Lack of macro-studies for general conclusions • Lack of dynamic component of analysis due to missing panel data • Lack of theoretical foundation =⇒ Crucial to understand mechanisms! Research questions • Why does certification start to emerge in some countries and in others not? (Extensive margin) 4 / 18
  20. 20. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Contribution to the literature and research questions Contribution to the literature • Lack of macro-studies for general conclusions • Lack of dynamic component of analysis due to missing panel data • Lack of theoretical foundation =⇒ Crucial to understand mechanisms! Research questions • Why does certification start to emerge in some countries and in others not? (Extensive margin) • What determines higher levels of certification and the fast spread in some regions? (Intensive margin) 4 / 18
  21. 21. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Conceptual framework Spread of standards (Macro-level) Extensive margin Adoption decision process over time (Micro-level) Macro-level indicators shaping micro-level behaviour Empirical model results Information phase Networks and information flow  Information on existence of GlobalGAP  Knowledge spillovers by peers Persuasion phase Confirmation phase Implementation phase Sustained exceeding of benefits beyond costs of re-certification Perceived direct costs and benefits of certification and risk attitude Macroeconomic environment and sectoral policies  Transaction costs Rogers’ phases of innovation adoption: Intensive margin Dynamics 5 / 18
  22. 22. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Zero inflated negative binomial model Estimation equations - First stage: Logit model 6 / 18
  23. 23. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Zero inflated negative binomial model Estimation equations - First stage: Logit model P r(yi,t = 0|xi,t) =exp(β0 + β1GGAP-Neighbouri,t + β2Urbani,t + β3Colonyi + β4FVareai,t + β5Inputsi,t + β6ExShareCropsi,t−1 + β7Age1534i,t + β8lnPopi,t + β9Ii,t + β10lnERi,t + β11DBi,t + β12lnDFAgi,t + β13MRLi,t + β14ISOi,t + β15MGDi,t + β16Roadi,t + β17wwwi,t + β18lnGDPpci,t + β19lnGDPpc 2 i,t + β20AgLandi,t + ψt + i,t) (1) where i = country, t = time period, ψt = year fixed effects and i,t = error term clustered at the country-level. GGAP − Neighbouri,t: Average number of neighbouring countries’ certified crop producers Urbani,t: Share of urban population Colonyi: Colonial history with one of the EU6 countries F V areai,t: Fruits and vegetables area harvested (’000 ha) Inputsi,t: Agricultural inputs indicator ExShareCropsi,t−1: One-year lag crop-export share of total exports Age1534i,t: Share of population in age cohort 15-34 years lnP opi,t: Log number of inhabitants per country Ii,t: Inflation rate lnERi,t: Log exchange rate DBi,t: Doing-Business indicator MRLi,t: Strict Maximum Residue limits dummy ISOi,t: ISO membership dummy lnDF Agi,t: Log development flows to agriculture (constant 2015 USD) MGDi,t: Share of modern grocery sales in total food retail and wholesale market Roadi,t: Road density per km2 wwwi,t: Share of population with fixed broadband subscription lnGDP pci,t: Log GDP per capita (current USD) AgLandi,t: Total arable land (’000 ha) 6 / 18
  24. 24. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Zero inflated negative binomial model Estimation equations - Second stage: Negative binomial model 7 / 18
  25. 25. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Zero inflated negative binomial model Estimation equations - Second stage: Negative binomial model E(yi,t|xi,t, yi,t > 0) =exp(β0 + β1GGAPi,t−1 + β2GGAP-Neighbouri,t + β3Urbani,t + β4ExShareEUi,t−1 + β5Colonyi + β6FVareai,t + β7Inputsi,t + β8ExShareCropsi,t−1 + β9Age1534i,t + β10lnPopi,t + β11Ii,t + β12lnERi,t + β13DBi,t + β14lnDFAgi,t + β15MRLi,t + β16∆TFPi,t + β17MGDi,t + β18Roadi,t + β19wwwi,t + β20Auditi + β21lnGDPpci,t + β22lnGDPpc 2 i,t + β23AgLandi,t + ψt + i,t) (2) GGAPi,t−1: One-year lag number of certified producers GGAP − Neighbouri,t: Average number of neighbouring countries’ certified crop producers Urbani,t: Share of urban population ExShareEUi,t−1: EU crop export share Colonyi: Colonial history with one of the EU6 countries F V areai,t: Fruits and vegetables area harvested (’000 ha) Inputsi,t: Agricultural inputs indicator ExShareCropsi,t−1: One-year lag crop-export share of total exports Age1534i,t: Share of population in age cohort 15-34 years lnP opi,t: Log number of inhabitants per country Ii,t: Inflation rate lnERi,t: Log exchange rate DBi,t: Doing-Business indicator MRLi,t: Strict Maximum Residue limits dummy ∆TFPi,t: Total factor productivity growth lnDF Agi,t: Log development flows to agriculture (constant 2015 USD) MGDi,t: Share of modern grocery sales in total food retail and wholesale market Roadi,t: Road density per km2 wwwi,t: Share of population with fixed broadband subscription lnGDP pci,t: Log GDP per capita (current USD) AgLandi,t: Total arable land (’000 ha) 7 / 18
  26. 26. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Summary of main findings: Extensive margin Why does certification start to emerge in some countries and in others not? Variable Effect Rational Information Communication Technologies + • Fast information flow • Lower costs of documentation and traceability. Urbanisation + • Agglomeration economies • Home market effect due to ‘western diets’ Modern grocery distribution in both developed and developing countries + • More access to standard-specific information • Increase in buyer power • Home market effect - less export dependency Development flows to agriculture + • Financial support: certification costs • Financial and technical support: initial investments Strict public standards (Maximum residue limit) + • Additional required private investments lower Note: A positive sign means that the variable increases the probability of entering the certification market. The horizontal lines separate Roger’s phases: (1) Informatio phase, (2) Persusasion phase, (3) Implementa- tion phase 8 / 18
  27. 27. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Summary of main findings: Intensive margin Why do some countries show high certification rates and why does it spread fast? Variable Effect Rational Existing trade networks with EU + • Network effects with core market • Vertical integration: multinationals – farmers • Export dependency and oligopsony market structures Domestic auditor + • Reduced certification costs Input indicator + • High total factor productivity due to access to inputs (labour, land, fertiliser, technology) Size of home population + • Home market effect Inflation rate – • Lower propensity to invest Doing business indicator + Reduced transaction costs, specifically: • Access to credit • Effective land-markets (secure property rights) • Functioning contract enforcement • Efficient trading across borders Strict public standards (Maximum residue limit) + • Overlap of public and private standard • Farmers’ investments imperative to serve domestic mar- ket → Part of initial investments needed to comply to GlobalGAP already made Transportation infrastructure + • Fast information flow • Lower trade costs to high-value markets Note: A positive sign means an increasing effect on the spread of GlobalGAP. The horizontal lines separate Roger’s phases: (1) Informatio phase, (2) Persusasion phase, (3) Implementation phase 9 / 18
  28. 28. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Some implications and major trends 10 / 18
  29. 29. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Some implications and major trends We find that... ... the domestic presence of modern retailers in more urban societies increases a country’s probability of GlobalGAP market entry. 10 / 18
  30. 30. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Some implications and major trends We find that... ... the domestic presence of modern retailers in more urban societies increases a country’s probability of GlobalGAP market entry. Thus... ...ongoing urbanisation and the expanding supermarket revolution (spreading also into rural areas) will open the door for some of the poorer countries in the future. 10 / 18
  31. 31. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Some implications and major trends We find that... ... the domestic presence of modern retailers in more urban societies increases a country’s probability of GlobalGAP market entry. Thus... ...ongoing urbanisation and the expanding supermarket revolution (spreading also into rural areas) will open the door for some of the poorer countries in the future. We also find that... ...the macroeconomic environment, sector policies, and infrastructure investments can support and intensify this process. 10 / 18
  32. 32. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Policy conclusions 11 / 18
  33. 33. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Policy conclusions • Agricultural specific bilateral development flows can help to overcome initial market access constraints. 11 / 18
  34. 34. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Policy conclusions • Agricultural specific bilateral development flows can help to overcome initial market access constraints. • Financial or technical support by regional development banks can reinforce agricultural sector development. 11 / 18
  35. 35. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Policy conclusions • Agricultural specific bilateral development flows can help to overcome initial market access constraints. • Financial or technical support by regional development banks can reinforce agricultural sector development. • Non Governmental Organisation carry part of the high certification costs. 11 / 18
  36. 36. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Policy conclusions • Agricultural specific bilateral development flows can help to overcome initial market access constraints. • Financial or technical support by regional development banks can reinforce agricultural sector development. • Non Governmental Organisation carry part of the high certification costs. • Agricultural sector policies and standard setters can facilitate access to inputs via input subsidies and extension services. 11 / 18
  37. 37. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Policy conclusions • Agricultural specific bilateral development flows can help to overcome initial market access constraints. • Financial or technical support by regional development banks can reinforce agricultural sector development. • Non Governmental Organisation carry part of the high certification costs. • Agricultural sector policies and standard setters can facilitate access to inputs via input subsidies and extension services. • Central governments should create a stable and stimulating macroeconomic environment: 11 / 18
  38. 38. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Policy conclusions • Agricultural specific bilateral development flows can help to overcome initial market access constraints. • Financial or technical support by regional development banks can reinforce agricultural sector development. • Non Governmental Organisation carry part of the high certification costs. • Agricultural sector policies and standard setters can facilitate access to inputs via input subsidies and extension services. • Central governments should create a stable and stimulating macroeconomic environment: • Trade agreements with core GlobalGAP markets 11 / 18
  39. 39. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Policy conclusions • Agricultural specific bilateral development flows can help to overcome initial market access constraints. • Financial or technical support by regional development banks can reinforce agricultural sector development. • Non Governmental Organisation carry part of the high certification costs. • Agricultural sector policies and standard setters can facilitate access to inputs via input subsidies and extension services. • Central governments should create a stable and stimulating macroeconomic environment: • Trade agreements with core GlobalGAP markets • Guarantee functioning executive authorities to enforce (GlobalGAP) contracts and to secure land tenure rights. 11 / 18
  40. 40. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Policy conclusions • Agricultural specific bilateral development flows can help to overcome initial market access constraints. • Financial or technical support by regional development banks can reinforce agricultural sector development. • Non Governmental Organisation carry part of the high certification costs. • Agricultural sector policies and standard setters can facilitate access to inputs via input subsidies and extension services. • Central governments should create a stable and stimulating macroeconomic environment: • Trade agreements with core GlobalGAP markets • Guarantee functioning executive authorities to enforce (GlobalGAP) contracts and to secure land tenure rights. • Infrastructure investments to reduce costs 11 / 18
  41. 41. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Policy conclusions • Agricultural specific bilateral development flows can help to overcome initial market access constraints. • Financial or technical support by regional development banks can reinforce agricultural sector development. • Non Governmental Organisation carry part of the high certification costs. • Agricultural sector policies and standard setters can facilitate access to inputs via input subsidies and extension services. • Central governments should create a stable and stimulating macroeconomic environment: • Trade agreements with core GlobalGAP markets • Guarantee functioning executive authorities to enforce (GlobalGAP) contracts and to secure land tenure rights. • Infrastructure investments to reduce costs • The development of domestic public food safety standards by agricultural ministries obliges farmers to invest. ⇒ Initial investment costs to comply with GlobalGAP now lower. 11 / 18
  42. 42. Thank you for your attention! Contact: Mail: Insa.Flachsbarth@agr.uni-goettingen.de Web: GlobalFood: Transformation of Global Agri-Food Systems
  43. 43. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Properties of dependent variable: Number of certified producers per country Specification tests of overdispersion • min=0, max=32550, mean = 602, variance = 6690634 ⇒ variance-mean ratio = 11117 02.0e-044.0e-046.0e-048.0e-04 Density 0 10000 20000 30000 GlobalGAP number of producers (scope crops) ⇒ Dependent variable highly skewed to the right ⇒ DGP leads to zero-inflated count data models with overdispersion 14 / 18
  44. 44. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Data I Descriptive statistics Certified Non-certified Sources mean sd min max mean sd min max GGAP producers (no.) 1130 3460 1.00 32550 GlobalGAP Information phase GGAP producers neighb. countries (mean no.) 1081 3040 0.00 32550 345 973 0.00 6894 GlobalGAP Share urban population 62.10 20.93 13.89 97.82 48.83 23.60 8.55 100.00 Worldbank Export share crops EU/world 44.91 29.92 0.00 99.10 30.94 32.27 0.00 100.00 UN Comtrade Colonial history with EU6 0.35 0.48 0.00 1.00 0.36 0.48 0.00 1.00 Cepii F&V (area harv. in hec.) 997 3857 0.00 37966 185 510 0.00 5070 FAOSTAT Persuasion phase Inputs (princ. component) 0.31 2.71 -0.59 19.76 -0.73 1.37 -4.27 3.3 USDA Export share crops/total 7.51 10.17 0.00 70.38 6.90 14.13 0.00 90.80 UN Comtrade Age cohort 15-34 years (share pop) 33.07 6.43 19.12 46.67 37.24 4.51 23.90 47.90 Worldbank Population (million) 60.45 186.27 0.02 1364.27 12.38 27.50 0.01 176.46 Worldbank Implementation phase Inflation rate 5.20 5.45 -8.28 44.39 6.54 7.69 -35.84 62.17 Worldbank Exchange rate (LCU/USD) 659 2701 0.28 25941 627 2248 0.21 19068 Worldbank Doing Business (princ. component) 0.57 1.30 -3.72 3.19 -0.73 1.37 -4.27 3.30 Worldbank Strict MRL (1=yes) 0.44 0.50 0.00 1.00 0.04 0.20 0.00 1.00 Homologa ISO membership (1=yes) 0.80 0.40 0.00 1.00 0.33 0.47 0.00 1.00 ISO 15 / 18
  45. 45. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Data II Certified Non-certified mean sd min max mean sd min max Sources Confirmation phase TFP growth rate 0.02 0.08 -0.47 0.67 0.01 0.09 -0.37 0.55 USDA Variables relevant in more than one of Rogers’ phases MGD 35.01 29.97 0.00 96.44 8.18 17.80 0.00 95.41 PlanetRetail Road density (per km2) 0.83 1.27 0.01 9.68 0.69 1.52 0.01 11.27 CIA, Worldbank WWW subsc. (pop. share) 12.74 14.14 0.00 104.52 4.83 8.49 0.00 36.55 Worldbank Domestic auditor (1 = yes) 0.39 0.49 0.00 1.00 0.00 0.00 0.00 0.00 GlobalGAP GDP per capita (‘000 cur- rent USD) 16.40 19.77 0.33 103.06 10.06 18.27 0.20 119.23 Worldbank Development flows to agr. (Mio. USD, constant 2015) 48.99 88.36 -0.22 629.69 18.14 33 0 325.77 FAOSTAT Controls Arable land (‘000 hec.) 11360 26743 1.00 161812 3525 12426 0.14 122240 FAOSTAT Developing country (1=yes) 0.64 0.48 0.00 1.00 0.81 0.39 0.00 1.00 Worldbank Note: MGD = Modern gocery distribution; F&V = Fruits and vegetables; MRL = Maximum residual limit; TFP = Total factor productivity 16 / 18
  46. 46. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Regression results I Table 2: Determinants of the spread of GlobalGAP certified farms VARIABLES NB - Stage two Logit - Stage one Information phase Lag no. GlobalGAP certified producers 0.001*** (0.000) Average no. certified neighbours 0.000 (0.000) 0.001** (0.000) Urban population 0.001 (0.019) -0.107** (0.048) EU crop export share 0.022*** (0.007) Colony with EU6 1.493*** (0.489) -0.959 (1.483) Fruits and vegetables area -0.001*** (0.000) -0.003 (0.002) Persuasion phase Agricultural Inputs 0.729** (0.315) 0.797 (3.101) Lag crop-export share of tot. Exports 0.055* (0.031) -0.015 (0.023) Age cohort 15-34 years 0.074 (0.051) 0.292** (0.142) ln Population 0.549*** (0.192) 0.392 (0.638) Implementation phase Inflation -0.064*** (0.024) -0.166 (0.111) ln Exchange rate -0.011 (0.077) 0.552** (0.238) Doing-Business 0.662*** (0.233) 0.149 (0.655) Maximum Residual Limits 1.770*** (0.463) -18.75*** (3.093) ISO membership 0.757 (1.049) Confirmation phase Total factor productivity growth 0.300 (0.737) 17 / 18
  47. 47. Motivation Research questions Conceptual framework Empirical model and data Results Conclusions Appendix Regression results II Continued: Determinants of the spread of GlobalGAP certified farms Variables relevant in more than one of Rogers’ phases ln Development flows to agriculture 0.074 (0.188) -1.593*** (0.542) Modern grocery*Developing 0.002 (0.008) -0.160*** (0.054) Modern grocery*Developed -0.036*** (0.012) -0.638** (0.298) Road density 0.342* (0.186) -2.295 (1.510) Fixed broadband subscription -0.042 (0.027) -0.471** (0.191) Audit 1.882*** (0.390) ln GDP per capita -0.788 (0.672) -0.312 (0.891) ln GDP per capita squared 0.334*** (0.129) 1.299*** (0.498) Control Arable land 0.000*** (0.000) 0.000 (0.001) Constant -9.174** (4.037) -6.379 (11.068) year fixed effects yes yes alpha 0.764*** (0.111) Observations 895 895 AIC 7420 7420 Chi-square test 324 324 Note: Robust standard errors are clustered by country and given in parentheses; *** p<0.01, ** p<0.05, * p<0.1; 18 / 18

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