Regional Production Adjustment to Import Competition: Evidence from the French Agro-Industry

This paper evaluates the impact of increasing imports on the reallocation of agrifood production across regions within countries. From French data for the period 1995-2002, we show that regional agrifood production adjusts differently to increasing imports according to the region where the agrifood firms are located. Even though proximity to consumers is important, an increase in agrifood imports does not increase agrifood production with a high demand but makes low-wage regions more attractive. In addition, an increase in imports of agricultural products processed by agrifood firms leads to the reallocation of agrifood production away from regions with good agricultural access and toward those with limited access to agricultural products.