Quality and the Great Trade Collapse

Chen, Natalie; Juvenal, Luciana

Quality and the Great Trade Collapse

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: We explore whether the global financial crisis has had heterogeneous effects on traded goods differentiated by quality. Combining a dataset of Argentinean firm-level destination-specific wine exports with quality ratings, we show that higher quality exports grew faster before the crisis, but this trend reversed during the recession. Quantitatively, the effect is large: up to nine percentage points difference in trade performance can be explained by the quality composition of exports. This flight from quality was triggered by a fall in aggregate demand, was more acute when households could substitute imports by domestic alternatives, and was stronger for smaller firms’ exports.

Keywords: Exports; heterogeneity; multi-product firms; quality; trade collapse; unit values; wine (search for similar items in EconPapers)
JEL-codes: F10 F14 F41 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1078

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