Heterogeneous Quality Firms and Trade Costs

Helble, Matthias ; Okubo, Toshihiro

World Bank, Washington, DC

关键词: ADVERTISING;    AGGREGATE DEMAND;    AIM;    AIRCRAFT;    AVERAGE PRICE;   

DOI  :  10.1596/1813-9450-4550
RP-ID  :  WPS4550

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

There is increasing empirical evidencethat vertical product differentiation is an importantdeterminant of international trade. However, the economicliterature so far has solely focused on the case in whichquality trade stems from differences between countries. Nostudies investigate the role of quality trade betweensimilar economies. This paper first develops a simpletheoretical trade model that includes vertical productdifferentiation in a heterogeneous-firm framework. The modelyields three main predictions for trade between similareconomies. First, exported goods are of higher quality thangoods sold on the domestic market. Second, larger economieshave on average higher export qualities compared withsmaller economies. Third, with increasing trade costs higherquality goods are exchanged. For all three effects, strongempirical support is found using detailed export trade dataof the United States and 15 European Union countries.