ABSTRACT As tariffs have declined globally through bilateral and regional trade agreements, food safety standards have emerged as significant determinants of agricultural trade flows. This study examines the impact of maximum residue limits (MRLs) for five pesticides—Azoxystrobin, Chlorpyrifos, Chlorantraniliprole, Clothianidin, and Cyhalothrin—on Vietnam's coffee and rice exports from 2002 to 2017. Employing a Poisson pseudo‐maximum likelihood (PPML) estimator on a sample of 194 potential trading partners, we address heteroskedasticity and zero‐trade observations that bias traditional gravity estimates. MRL endogeneity is addressed via a control function IV‐PPML approach; the endogeneity test confirms the baseline estimates are not materially biased. A probit‐based margin decomposition further reveals that MRL barriers operate through distinct cost channels. For coffee, Azoxystrobin and Chlorpyrifos act as significant trade barriers operating exclusively through the intensive margin, with a 10% reduction in permissible limits reducing export values by approximately 12% and 17% respectively. For rice, Clothianidin and Cyhalothrin restrict trade through both the intensive and extensive margins, while Chlorpyrifos operates as a pure market‐entry barrier. These heterogeneous findings reflect the domestic prevalence of specific chemicals, regulatory alignment between Vietnam and its principal importers, and differential enforcement capacity across destination markets, with distinct implications for targeted compliance investment.
Nguyen et al. (2026) studied this question.