Product Quality, Firm Heterogeneity and International Trade∗
نویسنده
چکیده
I explore variation in price and export status in industries where I can estimate product quality and technical efficiency separately. The empirical results show that prices are increasing in quality and decreasing in efficiency and that selection into exporting is driven mainly by quality. Firms export because they generate more demand for their products, not because they can produce at lower cost. This result is consistent with a model that includes per unit transportation costs. In that case, changes in quality and efficiency have different impact on the firm’s optimal strategy. On the one hand, firms with a cost advantage charge lower prices, are less likely to export and, when they do, sell a smaller fraction of their output in foreign markets. On the other hand, firms that can produce high quality products charge higher prices, are more likely to export and obtain a larger share of their revenue from foreign sales.
منابع مشابه
Technical Appendix: Product Quality and Firm Heterogeneity in International Trade (Not For Publication)
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