Trade collapse, quality and food exports
Lucia Pacca () and
Alessandro Olper ()
Applied Economics Letters, 2013, vol. 20, issue 18, 1614-1617
This article revisits the so-called 'Collapse in Quality' hypothesis, according to which, during the 2008--2009 crisis, higher quality goods experienced a stronger export reduction compared to low-quality ones. Using disaggregated trade data from three European countries that traditionally export high-quality food products -- France, Italy and Spain -- we do not find any econometric evidence supporting this hypothesis. In contrast, we provide preliminary evidence for the concurrent hypothesis, namely that firms reduced their markup to preserve market share.
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