Norway is the world’s second largest seafood exporter and more than 90% of the seafood produced is exported. The most valuable specie in Norwegian exports of seafood is farmed salmon, for which Norway is the world’s leading producer. Salmon is also among the most traded fish species globally with the most advanced logistics.
There exist a large body of literature on international trade highlighting the importance of firm characteristics and trade costs for export. This is also true for research on seafood trade. It is well-known that exporters of seafood share common characteristics of exporters found in the general literature of international trade. Exporters are relatively few and compared to non-exporters they are both larger and more productive. A few firms account for a relatively large share of export value. It is well known that as trade costs increases export value will decline. Less is known about the actual composition of firm-level trade costs. In this paper we investigate how foreign business costs, costs that stem from e.g. laws, regulations, macroeconomic stability, and customs in the destination market, affects exports of salmon.
Foreign business costs are proxied by the index provided by the Fraser Institute, the Canadian public policy organization. This data source covers 124 different countries and is constructed using primary data sources such as the World Bank and IMF. Data from the Fraser Institute will include both an overall index for costs of doing business in different countries, as well as five different sub-components from the overall index. Our results indicate that improvements in foreign business costs increases the export of salmon from Norway, but the impact differs between types of the exporting firms. The effect from improved foreign business costs are strongest for firms that has their main activity related to wholesale and distribution of salmon. The effect is not as strong for producers that also handles export themselves. Further, we show that this effect is still present after controlling for traditional gravity variables such as geographic distance and the size of the economy in the destination country. Finally, the effects from the different sub-components of the index on export is investigated for different groups of exporting firms.