Minimum Quality Standards and Exports

Jan Voßwinkel and Laura Birg

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: This paper studies the interaction of a minimum quality standard and exports in a vertical product differentiation model when firms sell global products. If ex ante quality of foreign firms is lower (higher) than the quality of exporting firms, a mild minimum quality standard in the home market hinders (supports) exports. The minimum quality standard increases quality in both markets. A welfare maximizing minimum quality standard is always lower under trade than under autarky. A minimum quality standard reduces profits for the exporting firm. It increases domestic welfare, but reduces welfare in the export market.

JEL-codes: F12 L13 L50 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-bec and nep-int
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https://www.econstor.eu/bitstream/10419/145846/1/VfS_2016_pid_6922.pdf (application/pdf)

Related works:
Working Paper: Minimum quality standards and exports (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145846

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