Quality and Gravity in International Trade

Florian Unger and Lisandra Flach

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We show that the effect of fixed costs on international trade is lower in industries with a high degree of vertical product differentiation. We extend an international trade model by endogenous quality investmetns and use both aggregate trade data and firm-level data to estimate gravity equations of exports. Accounting for quality lowers the positive gains from trade and leads to more heterogeneous effects across industries compared to a trade model without quality.

JEL-codes: F12 F14 L11 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-bec, nep-cta and nep-int
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Quality and gravity in international trade (2022)
Working Paper: Quality and Gravity in International Trade (2018)
Working Paper: Quality and Gravity in International Trade (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168268

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