Mutual recognition of geographical indications and China's agricultural exports—On the use of domestic and international markets

Geographical indication (GI) represents the specific good quality and reputation of the regional characteristics of agricultural products, which is a positive approach for stabilizing the export of agricultural products under China's new “Dual Circulation” pattern. This study used the propensity score matching–double difference (PSM–DID) method empirically testing the effect and mechanism of the mutual recognition of GIs between China and the EU on China's agricultural product export from 2000 to 2016 based on theoretical analysis of the effect mechanism of GI on agricultural product exports. The results show that: (1) The mutual recognition of GIs significantly increased the binary margin of China's agricultural exports, and the effect on the intensive margin was stronger than that on the extensive margin, and the effects on the three subvariables of the extensive margin are in the following order: old products exported to new markets > new products exported to old markets > new products exported to new markets; (2) The heterogeneity analysis shows that the mutual recognition of GIs contributes more to state‐owned enterprises, enterprises in the eastern region and to export destinations in EU countries; (3) The mechanism analysis shows that domestic demand–driven, quality upgrading and signal transmission are important mechanisms in the export effect of mutual recognition of GIs. This research shows that vigorously promoting the mutual recognition of GIs between China and the EU are important factors in promoting the growth of China's agricultural exports and achieving high‐quality agricultural development. [EconLit Citations: F14, Q17, Q18].