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Export Destinations and Input Prices

Paulo Bastos, Joana Silva () and Eric Verhoogen ()

American Economic Review, 2018, vol. 108, issue 2, 353-92

Abstract: This paper examines the relationship between the destination of exports and the input prices paid by firms, using detailed customs and firm-product-level data from Portugal. Both ordinary least squares regressions and an instrumental-variable strategy using exchange-rate movements (interacted with indicators for initial exports) as a source of variation in destinations indicate that exporting to richer countries leads firms to pay higher prices for inputs, other things equal. The results are supportive of what we call the income-based quality-choice channel: selling to richer destinations leads firms to raise the average quality of goods they produce and to purchase higher-quality inputs.

JEL-codes: D22 D24 F14 F31 L15 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/aer.20140647
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Working Paper: Export Destinations and Input Prices (2014) Downloads
Working Paper: Export Destinations and Input Prices (2014) Downloads
Working Paper: Export destinations and input prices (2014) Downloads
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Handle: RePEc:aea:aecrev:v:108:y:2018:i:2:p:353-92