Quality upgrading and price heterogeneity: Evidence from Brazilian exporters

Lisandra Flach

Journal of International Economics, 2016, vol. 102, issue C, 282-290

Abstract: This paper uses producer quality information to investigate whether firms segment markets and adapt product quality and prices according to destination country characteristics. Using detailed price and quality data for Brazilian exporters over time, the results document quality-based market segmentation, by which firms raise quality and prices to high-income destinations. A major exchange rate shock and further robustness analysis reinforce the hypothesis that adjustments in quality and prices happen within the firm and that differences in prices across destinations may be driven by investments in product quality and demand for high quality.

Keywords: Export prices; Quality upgrading; Innovation; Market segmentation (search for similar items in EconPapers)
JEL-codes: F12 F14 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (47)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:102:y:2016:i:c:p:282-290

DOI: 10.1016/j.jinteco.2016.07.005

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