Heterogeneous firms and import quality: evidence from transaction-level prices

Benjamin Mandel ()

No 991, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: A key emerging insight in international economics is that the scope for quality differentiation can help to explain patterns in export prices at the level of products or firms. In this paper, a unified theoretical framework of firm heterogeneity in cost and quality is brought to bear on an expansive data set of U.S. import transaction prices collected by the Bureau of Labor Statistics (BLS). The higher moments of the price distribution are used to identify the scope for quality differentiation at the detailed product level; highly differentiated products account for about half of U.S. import value. The product classification is then used to evaluate two claims in the nascent firm-level trade quality literature. First, the positive link between exporter capability and price is found to depend on the nature of the product: productive exporters simultaneously specialize in high-priced varieties in quality differentiated goods and low-priced varieties in more homogeneous goods. Second, a novel time series test documents firm sorting into export markets according to output quality.

Keywords: Imports; -; Prices (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-com and nep-int
References: Add references at CitEc
Citations: View citations in EconPapers (27)

Downloads: (external link)
http://www.federalreserve.gov/pubs/ifdp/2010/991/default.htm (text/html)
http://www.federalreserve.gov/pubs/ifdp/2010/991/ifdp991.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:991

Access Statistics for this paper

More papers in International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().