Quality and the Great Trade Collapse

Chen, Natalie; Juvenal, Luciana

Quality and the Great Trade Collapse

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: We explore whether the global financial crisis has had heterogeneous effects on traded goods differentiated by quality. Combining a dataset of Argentinean firm-level destination-specific wine exports with quality ratings, we show that higher quality exports grew faster before the crisis, but this trend reversed during the recession. Quantitatively, the effect is large: up to nine percentage points difference in trade performance can be explained by the quality composition of exports. This flight from quality was triggered by a fall in aggregate demand, was more acute when households could substitute imports by domestic alternatives, and was stronger for smaller firms’ exports.

Keywords: Exports; heterogeneity; multi-product Firms; quality; trade collapse; unit values; wine. JEL Classification: F10; F14; F41 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:249

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