The relationship between a firm's markups and its export behavior is highly relevant to individual firms' strategic decisions as well as to governments' policies regarding competition. We investigate the impact of markups on firms' decisions to export and resulting export intensity in the French food processing industry. Moreover, we assess the effect of entry into and remaining in the export market on firms' markups and evaluate differences in markups between exporters and non‐exporters. Our results suggest that higher markups lead to both increased participation in the export market and greater export intensity. In addition, we find that firms obtain higher markups by entering and remaining in the export market. Finally, our results suggest that exporters generate higher markups, on average, than non‐exporters. Similar results are found when controlling for differences in firms' productivity. Our findings suggest that trade policies designed to increase firms' participation in export markets, such as limits to border restrictions, may counteract domestic competition policies targeted at price–cost margins.

Recent trade disruptions and their consequences on supply chains show the importance of stable trade relations for exporters' economic planning and importers' supply security. Both instability in trading partners' economic and institutional environment and differences between them are likely to exacerbate these disruptions. We investigate the role of exporters' institutional quality (IQ) and its similarity with importers' IQ in the stability of trade links. We focus on the trade links of agri‐food products exported from sub‐Saharan African (SSA) countries to the European Union (EU‐28) and consider three dimensions of IQ: ‘government selection, monitoring, and replacement’; ‘efficiency of policy formulation and implementation’; and ‘respect of citizens and state for institutions’. Using a discrete‐time duration model, we show that the duration of SSA exports to the EU‐28 increases with higher exporters' IQ and similarity of trading partners' IQ. The strongest impact of exporters' IQ is associated with ‘government selection, monitoring, and replacement’. In terms of the similarity of trading partners, ‘respect of citizens and state for institutions’ has the largest impact on trade durations. Our findings suggest that the improvement of countries' IQ may boost the stability of trade relationships. Moreover, the similarity of IQs between trading partners supports the stability of trade links and should be carefully considered when establishing new trade relations.

Growing concerns in the major importing countries on the socio-environmental sustainability of oil palm farming may affect the import demand of palm oil and hence the economy of the exporting countries. This paper develops a comparative static, partial equilibrium model to examine the impact of potential reductions in EU imports of Indonesia’s palm oil on palm oil output, prices, factor markets, trade, deforestation, and peatland conversion in Indonesia. Results suggest that there would be only small impacts on the major environment-economic variables in Indonesia in a scenario with a moderate reduction EU import demand, for example, due to sustainability concerns. However, the impacts would be more profound if sustainability concerns also affect other import regions and trigger a similar decline in import demand in other markets. The way forward for Indonesia and other palm oil producers and exporters is to adopt a common set of sustainability criteria, encompassing the elements of transparency, regulatory compliance, best agricultural practices, environmental responsibility, the livelihood of small farmers, as well as human and community rights.