Do Standards Improve the Quality of Traded Products?

Anne-Célia Disdier, Carl Gaigne and Cristina Herghelegiu

No 2018-38, Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: We examine whether standards raise the quality of traded products by correcting market failures associated with information asymmetry on product attributes. Our predictions on their quality and selection effects are based on a new trade model under uncertainty about product quality in which heterogeneous firms can strategically invest in quality signaling. Using French firm-level data, we exploit information on prices and productivity toestimate the quality of exported products. Higher quality is assigned to products supplied by an exporter with higher marginal costs conditional on productivity. In accordance with our theory, quality standards enforced on products by destination countries (i) reduce the export probability of low-quality firms but also that of high-quality low-productivity firms; (ii) increase the export participation and sales of high-productivity high-quality firms; (iii) improve the average quality of consumption goods exported by France.

Keywords: Firm exports; quality standards; information asymmetry; product quality (search for similar items in EconPapers)
Pages: 57 p.
Date: 2018-12
New Economics Papers: this item is included in nep-agr, nep-int and nep-sbm
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Do standards improve the quality of traded products? (2023)
Working Paper: Do standards improve the quality of traded products? (2023)
Working Paper: Do standards improve the quality of traded products? (2023)
Working Paper: Do Standards Improve the Quality of Traded Products? (2021)
Working Paper: Do Standards Improve the Quality of Traded Products? (2021)
Working Paper: Do Standards Improve the Quality of Traded Products? (2021)
Working Paper: Do Standards Improve the Quality of Traded Products? (2020)
Working Paper: Do Standards Improve the Quality of Traded Products? (2018)
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