How food safety affects international trade is an important factor to be studied for low-income countries which continue to rely on agricultural exports. Iran, as the greatest pistachio exporter in the world, encounters a serious problem of aflatoxin contamination. This food safety shocks affected Iran’s income which has caused a lot of damages to the country’s economy. The paper estimates the effect of food safety concerns on Iran’s pistachio export during 1997 to 2006. Using a generalized gravity model, we find that food safety has significant effect on Iran’s pistachio export, beside other factors that have effect on pistachio trade. Based on our analysis, food safety regulations have a greater effect in the long run as against the short run. Programs aimed at reducing aflatoxin contamination of pistachio is a key recommendation for policy makers. The results of this study suggest that Iran pistachio growers would benefit from better marketing and increased food safety regulations to maintain its export market share in the world
Key words: pistachio, food safety, panel data, generalized gravity model, Iran.
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