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Introduction
Improving the quality and safety of exported agricultural products is crucial for enhancing China's agricultural competitiveness and achieving high-quality agricultural development. However, issues like pesticide residues and microbial contamination hinder Chinese agricultural exports. The Chinese government's emphasis on digital trade and digital transformation presents an opportunity to address these challenges. This study examines the impact of enterprise digital transformation on the quality and safety of exported agricultural products, considering the specific characteristics of the agricultural sector and exploring potential mechanisms. The study aims to provide empirical evidence for supporting policies that promote high-quality export development in the digital era. The research questions address whether agricultural enterprises can improve the quality and safety of their exported products through digital transformation, the underlying mechanisms involved, and whether the impact varies across different enterprises and export markets.
Literature Review
The paper reviews three relevant strands of literature: the quality of agricultural exports, enterprise digitalization, and the impact of digital transformation on export trade. Research on agricultural export quality has explored various measurement methods and influencing factors, including trade measures and SPS regulations. Studies on enterprise digitalization have focused on its definition, measurement, and economic effects, such as improved productivity and innovation. Finally, the literature on digital transformation and export trade highlights the role of digital technologies in reducing information barriers and expanding trade flows. The authors note a gap in the literature regarding the impact of digital transformation specifically on the quality and safety of exported agricultural products, particularly considering the unique characteristics of these products. This study aims to fill this gap by focusing on food safety and quality assurance.
Methodology
The study uses a staggered difference-in-differences (DID) model to analyze data from Chinese listed companies and Chinese Customs from 2007 to 2016. The dependent variable is the quality and safety level of exported agricultural products, measured using a composite index based on information disclosure in annual reports, covering quality traceability, quality control, risk prevention, and information communication. The main explanatory variable is the degree of enterprise digital transformation, quantified using Python crawler technology to analyze keyword frequencies in annual reports across five dimensions: digital technology application, digital information system, digital intelligent management, digital marketing model, and digital efficiency enhancement. The study controls for various factors such as GDP per capita in importing countries, openness to trade, exchange rates, SPS measures, tariffs, and geographical distance. Robustness checks are performed using alternative dependent variable measurements, sample trimming, Heckman two-step correction for sample selection bias, placebo tests, and endogeneity tests using instrumental variables (density of long-distance fiber-optic cable lines and the number of post offices per million population in 1984). Heterogeneity analyses examine variations in the impact based on export destination (developed vs. developing countries), firm location (eastern, central, western regions), firm ownership (state-owned vs. non-state-owned), and product type (bulk, intermediate, consumer-oriented, and other related agricultural products). Finally, mediation analysis explores the mechanisms through which digital transformation affects export quality and safety, considering technological innovation, product traceability, information sharing, and quality assurance.
Key Findings
The study's key findings are: 1. Enterprise digital transformation significantly improves the quality and safety of exported agricultural products. This positive effect persists after various robustness checks addressing endogeneity and potential biases. 2. Heterogeneity analysis reveals that the positive impact of digital transformation is more pronounced for exports to developed countries, non-state-owned enterprises, firms located in the eastern region, and for bulk and consumer-oriented agricultural products. 3. Mediation analysis demonstrates that digital transformation enhances export quality and safety through four key mechanisms: technological innovation (increased R&D investment and technological sophistication), product traceability (improved supply chain transparency and recall capabilities), information sharing (increased transparency and responsiveness to consumer feedback), and quality assurance (enhanced product certification and labelling). The results are supported by various robustness checks, including using lagged digital transformation data to address potential endogeneity concerns. The study uses instrumental variables to address the potential reverse causality.The positive impact is more significant for firms exporting to developed countries due to higher consumer demand for quality products and more online shopping habits. The findings also show that digital transformation is more impactful for non-state-owned enterprises due to greater flexibility and incentives for innovation compared to state-owned enterprises. Regional heterogeneity reveals a stronger effect in the eastern region due to better digital infrastructure and resources. Finally, the positive impact is stronger for bulk and consumer-oriented agricultural products, reflecting higher quality and safety requirements. Graphs and tables visually represent the trends in the quality and safety index, parallel trend tests, dynamic effects, benchmark regression results, and robustness checks. The study demonstrates the robustness of its findings through multiple tests and analyses.
Discussion
The findings provide strong evidence that digital transformation is a powerful tool for upgrading the quality and safety of Chinese agricultural exports. The mechanisms identified highlight the importance of investing in technology, improving traceability, enhancing information sharing, and strengthening quality assurance systems. These results have significant implications for policymakers and businesses in China's agricultural sector. The heterogeneous effects underscore the need for targeted policies that address the specific challenges and opportunities faced by different types of exporters and in different regions. The study's contribution lies in its comprehensive examination of the impact and mechanisms of digital transformation, providing valuable insights for promoting high-quality agricultural export development in China.
Conclusion
This research demonstrates that digital transformation significantly enhances the quality and safety of Chinese agricultural exports, particularly for developed markets, non-state-owned enterprises, and the eastern region. The effects are channeled through technological innovation, traceability, information sharing, and quality assurance. Future research could explore the long-term impacts, the role of specific digital technologies, and the interaction between digital transformation and other policies aimed at improving agricultural exports.
Limitations
The study's limitations include data availability, restricting the analysis to listed companies and the period 2007-2016. The measurement of quality and safety relies on information disclosed in annual reports, which may not fully capture all aspects of quality. The reliance on textual analysis for measuring digital transformation intensity could also introduce some subjectivity. Despite these limitations, the study's findings offer significant insights into the importance of digital transformation in improving agricultural exports.
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