Quality Competition Versus Price Competition Goods: An Empirical Classification

Richard Baldwin and Tadashi Ito

Journal of Economic Integration, 2011, vol. 26, 110-135

Abstract: Based on theoretical distinctions suggested by the heterogeneous firms trade model and the quality heterogeneous firms trade model, we classify exports at the HS 6-digit level as being characterised by either quality or price competition. We find a high proportions of quality-competition goods for the major EU countries and lower proportions for Canada, Australia and China. However, the overlap of these quality-competition goods is not large which suggests that the HS-6 digit data is too aggregate; firm-level data may be needed. Our findings suggest that dumping investigations must pay careful attention to the exact definition of products, and the study of technological gaps across nations by analysing composition of their export basket (Hausman, Huang and Rodrik 2007) should be interpreted with caution.

Keywords: Quality vs Price Competition; Heterogeneous Firms Trade Model (search for similar items in EconPapers)
JEL-codes: F14 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (17)

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Related works:
Working Paper: Quality Competition Versus Price Competition Goods: An Empirical Classification (2008)
Working Paper: Quality competition versus price competition goods - An empirical classification (2008)
Working Paper: Quality competition versus price competition goods: An empirical classification (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0532

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