Small is Beautiful? Firm Size, Prevention and Food Safety

Abstract: Food safety crisis have led governments to increase the responsibility of food operators asking them to implement preventive efforts. In this article, we explore the relationship between firm size and its preventive efforts she does implement in order to avoid food safety outbreaks. We show two main results: First, when cross-contamination between units is unlikely, small firms provide higher preventive efforts than large firms. Second, when cross-contamination between units can occur, the effort-size curve may have an inverted U-shape. From our results we argue that when designing and implementing new food safety regulations, governments should consider both firm size and the type of food safety hazards.