Effects of regulatory policy mixes on traceability adoption in wholesale markets: Food safety inspection and information disclosure

Abstract

The increasingly heavier burden of government spending on food safety supervision is a common problem faced by regulatory agencies in various countries. Traceability is an effective quality and safety management measure and plays an important role in food safety risk control in many developed countries. However, the agricultural product traceability system in wholesale markets has low coverage in China. This article investigates the effects of regulatory policy mixes, i.e., food safety sampling intensity and information disclosure, on vendors’ traceability adoption, theoretically and empirically based on a dataset containing the information of all aquatic product wholesale markets in three provinces of China. The results show that both sampling intensity and information disclosure positively influence the traceability adoption of vendors. However, the effect of food safety sampling intensity on traceability adoption relies on information disclosure. Specifically, an increase of 10 sampling tests enhances the probability that vendors adopt traceability by 4 percentage points in markets with information disclosure. These effects are heterogeneous across vendors with different business scales and with different supply chain distances from farms. The effects are larger for vendors with larger business scales and/or are closer to farms. The above results are robust after the inclusion of the instrumental variable into the models.