Average income, income inequality and export unit values

Hélène Latzer and Florian Mayneris

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Abstract: This paper analyses the relationship between a country's income distribution and its exports' unit values. Using bilateral export flows, we not only confirm the positive relationship between a country's average income and the quality of its exports, but further identify a heterogeneous impact of income inequality: we find a greater income spread to be beneficial for an exporter's unit values in the case of poor countries only. These results are robust to the inclusion of controls for other determinants of export unit values, as well as to the use of alternative measures of income inequality and of the quality index. We finally show that this heterogeneous impact of income inequality along the average income dimension is consistent with models emphasizing the role of the composition of local demand in determining the comparative advantage of countries in terms of quality.

Keywords: Income distribution; Export Unit Values; Product quality; Trade; Home market effect (search for similar items in EconPapers)
Date: 2018-10
New Economics Papers: this item is included in nep-int
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01901256v1
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Citations: View citations in EconPapers (1)

Published in 2018

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Related works:
Journal Article: Average income, income inequality and export unit values (2021)
Working Paper: Average income, income inequality and export unit values (2021)
Working Paper: Average income, income inequality and export unit values (2021)
Working Paper: Average income, income inequality and export unit values (2021)
Working Paper: Average income, income inequality and export unit values (2018)
Working Paper: Average income, income inequality and export unit values (2018)
Working Paper: Average income, income inequality and export unit values (2018)
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