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Do Standards Improve the Quality of Traded Products?

Anne-Célia Disdier, Carl Gaigne and Cristina Herghelegiu

No 320035, Working Papers from Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2)

Abstract: We examine whether standards raise the quality of traded products by correcting market failures associated with information asymmetry on product attributes. Matching a panel of French firmproduct- destination export data with a dataset on sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBTs), we find that such quality standards enforced on products by destination countries: (i) favor the export probability of high-quality firms provided that their productivity is high enough; (ii) raise the export sales of high-productivity high-quality firms at the expense of low-productivity and low-quality firms; (iii) improve the average quality of consumption goods exported by France. We then develop a simple new trade model under uncertainty about product quality, in which heterogeneous firms can strategically invest in quality signaling, to rationalize these empirical results on quality and selection effects.

Keywords: Demand and Price Analysis; Industrial Organization; International Relations/Trade (search for similar items in EconPapers)
Pages: 47 p.
Date: 2021-12-31
New Economics Papers: this item is included in nep-agr, nep-ban and nep-int
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Related works:
Working Paper: Do Standards Improve the Quality of Traded Products? (2021) Downloads
Working Paper: Do Standards Improve the Quality of Traded Products? (2021) Downloads
Working Paper: Do Standards Improve the Quality of Traded Products? (2020) Downloads
Working Paper: Do Standards Improve the Quality of Traded Products? (2018) Downloads
Working Paper: Do Standards Improve the Quality of Traded Products? (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:inrasl:320035

DOI: 10.22004/ag.econ.320035

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