Amid burgeoning global population growth, the integration of Voluntary Sustainability Standards (VSS), into the global food system has become increasingly prominent. This paper examines the relationship between the adoption of VSS and product quality upgrading, gauged by a country’s export market share in the importers’ markets. We develop a theoretical framework to assess the impact of VSS certification on food prices and demand in both domestic and foreign markets. The findings indicate that VSS-certified products not only correlate positively with increased exports but also enhance importers’ consumption of domestic VSS-certified products. Our empirics investigate the correlation between VSS proliferation and product quality upgrading. The results demonstrate variability in the impact of VSS on quality differentiation. Specifically, voluntary standards that emphasize quality significantly improve upgrading for countries far from the world frontier. Additionally, for highly differentiated products, the implementation of more non-compliance requirements proves to be an effective strategy to increase market share in markets with strong domestic demand. However, VSS focused on environmental and social concerns are less associated with quality upgrading. Introducing optional requirements could offer policymakers a strategic tool to enhance the competitive edge of exporters in diverse markets.
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