Decomposing firm-product appeal: how important is consumer taste?

Bee Yan Aw, Yi Lee and Hylke Vandenbussche

No 617076, Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: We develop and structurally estimate a trade model in order to identify the importance of consumer taste for exporters. The model separates taste from quality and productivity (TFPQ) at the firm-product level. Export data by destination countries allow us to identify the level of taste from consumer heterogeneity across destinations. We decompose export revenue into the contribution of taste, quality and costs. We fi nd that taste is very important and explains about 50% of the variation in export revenue. Productivity (TFPQ) differences between firm-products become more prominent than taste in explaining export success only when the cost elasticity of improving quality is high.

Date: 2018-02-11
New Economics Papers: this item is included in nep-int
References: Add references at CitEc
Citations:

Published in CEPR Discussion paper series, DP12707 , pages 1-61

Downloads: (external link)
https://lirias.kuleuven.be/retrieve/500446 (application/pdf)
KU Leuven intranet only, request a copy at https://lirias.kuleuven.be/handle/123456789/617076

Related works:
Working Paper: Decomposing Firm-Product Appeal: How important is Consumer Taste? (2018)
Working Paper: Decomposing firm-product appeal: how important is consumer taste? (2018)
Working Paper: Decomposing firm-product appeal:How important is consumer taste ? (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:617076

Access Statistics for this paper

More papers in Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven
Bibliographic data for series maintained by library EBIB ().