Quality and the Great Trade Collapse

Chen, Natalie; Juvenal, Luciana

Quality and the Great Trade Collapse

No 392, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano

Abstract: We explore the heterogeneous effects of the global financial crisis on international trade flows differentiated by quality. Combining a dataset of Argentinean firm-level destination-specific wine exports with experts quality ratings, we show that higher quality exports collapsed more dramatically during the recession. This flight from quality was triggered by a fall in aggregate demand, and was stronger for smaller firms’ exports and in the countries where households could substitute imports by domestic alternatives. Quantitatively, our results suggest that the quality composition of exports can explain up to nine percentage points difference in trade performance.

Keywords: Exports; financial crisis; heterogeneity; multi-product firms; quality; wine. (search for similar items in EconPapers)
JEL-codes: F10 F14 F41 (search for similar items in EconPapers)
Pages: 44
Date: 2016-05-09, Revised 2016-05-09
New Economics Papers: this item is included in nep-ger and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:csl:devewp:392

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