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Do Standards Improve the Quality of Traded Products?

Anne-Célia Disdier, Carl Gaigne and Cristina Herghelegiu

No 1808, CEPREMAP Working Papers (Docweb) from CEPREMAP

Abstract: Quality-focused non-tariff measures are increasingly adopted by policy makers to address market failures. This paper tests for their selection and quality effects in a context of information asymmetry regarding product attributes. Our theory reveals that the enforcement of quality standards (QSs) induces the exit of low-quality firms but also that of some high-quality ones. The overall quality effect is therefore ambiguous. Using French firm data, we find that the QSs imposed by destination countries increase the probability, volume and value of exports of high-productivity medium-quality firms at the expense of low-productivity high-quality firms. QSs improve the average quality of exported consumption goods.

Keywords: Firm exports; Quality standards; Information asymmetry (search for similar items in EconPapers)
Date: 2018-12
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