approach would require an appropriate exogenous instrument that would influence only the decision to export in the first-stage and not the volume of exports in the second stage. For completeness, we report estimates in Column 4 of a two-stage Heckman model, where no variable satisfies the exclusion restriction.

Finally, we run the threshold-tobit type of model applied by Eaton-Tamura (1994) among others, in the context of gravity models. Indeed, Eaton and Tamura (1994) proposed to estimate a variation of the Tobit model in which the maximum likelihood (ML) function is modified to endogenize the choice of the av parameter, so that the dependent variable is X ln(av+ ikt ). Then the ML estimator includes an estimate of the value of av among the set of estimates which means that the dependent variable will be censored at the value ln (av). See Eaton and Tamura (1994) or de Melo and Portugal-Perez (2011) for more details on the estimator. Column 5 in Table 5 reports estimates of the threshold-tobit. As the estimated value for av is close to zero (av= 0000458), estimates are very close to the baseline estimates using OLS. We retain OLS estimates as our baseline estimates here.

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Table 6 reports estimates for the seven product groups. The impact of standards seems to vary to some extent but the impact on exports is positive. Mandatory international standards for tea, cereals, and vegetables were excluded from the model because of mulitcollinearity with dummy variables. In the other estimates, however, the variable shows the expected positive sign and is statistically significant for sugar. Domestic mandatory standards are also positive and significant for most product groups. As in the baseline model, the marginal effect for mandatory international standards is larger than the impact of domestic mandatory standards. In other words, one additional international standard leads to more exports than one additional domestic standard. The different results for the impact of mandatory standards might be related to the ability of the standard to provide information on the product characteristic and to serve as a quality signal for potential consumers on the one hand and product adaption costs on the other hand. The ability to provide information on pesticide residues, for example, leads to reduced transaction costs and increases trade.

The impact of voluntary standards is less clear. Domestic voluntary standards are positively correlated with Chinese exports for most product groups but the impact of voluntary international standards is ambiguous. The impact of international standards is positive and highly significant for vegetables and sugar but negative and significant for tea and fish. A plausible explanation for the low impact of voluntary standards is the lack of implementation by Chinese farmers and food producers. Although there is no data on the implementation of voluntary standards, the China Statistical Yearbook of Certification and Accreditation (cited in Jin et al. 2008) shows that in 2005 the number of voluntary food safety standards for hazard analysis and critical control point (HACCP) was implemented by only 21.9 percent of the food producers Assuming that this figure is representative for implementation of voluntary 12