AQUA 2024

August 26 - 30, 2024

Copenhagen, Denmark

THE IMPORTANCE OF QUALITY IN NORWEGIAN SALMON EXPORTS

Hans-Martin Straume*, Frank Asche and Atle Oglend

BI Norwegian Business School

Po.Box 6233

5893 Bergen, Norway

hans-martin.straume@bi.no

 



A large and growing literature on international trade focuses on differences in product quality and its implications for trade dynamics. However, this is an issue that has received limited attention in relation to the seafood trade despite the large quantities of seafood being traded and the significant heterogeneity in qualities. Using Norwegian firm-level customs data this paper investigates the heterogeneous effects of varying quality on the export of different product forms of salmon. It is widely accepted that increased product quality increases trade values, but a major challenge has been to estimate quality at the product level and quantify the effect on trade values. We estimate market specific elasticities of substitution , and follows the empirical strategy suggested by Khandelwal (2010) to extract a measure of quality  from the residual export variation. Our results suggest a large and significant effect from quality on export value of both fresh whole salmon and fresh fillets of salmon. We control for traditional gravity variables and find that the  negative  distance effect  on  export value is reduced as quality increases. Our results adds to a growing literature exploring the micro fundaments of the aquaculture supply chain which are particularly important in obtaining insights with respect to the pricing strategies of different  seafood  exporters in different markets.