EconPapers    
Economics at your fingertips  
 

Quality standards, industry structure and welfare in a global economy

Carl Gaigne and Bruno Larue
Additional contact information
Bruno Larue: Department of Agricultural Economics and Consumer Studies - Université Laval

Post-Print from HAL

Abstract: We study the impact that mimimum quality standards have on industry structure, trade, and welfare when firms can develop their own private standard with a higher quality than the public standard. We introduce vertical differentiation in a firm-based trade model in which firms differ in terms of their productivity and non-cooperatively select the quality and price of their product. A higher public standard increases prices set by constrained and unconstrained firms, but the effect on firms’ output is generally ambiguous for both types of firms. The most productive firms raise their private standard and enjoy higher profits at the expense of less productive firms. A public standard can increase welfare, especially when there is a high concentration of low productivity domestic firms because of a better allocation of resources.

Keywords: public standard; private standard; product quality; entry/exit; welfare; input output; social help; norme privée; norme publique; qualité des produits; entrée sortie; aide sociale (search for similar items in EconPapers)
Date: 2016
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01574927
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Published in American Journal of Agricultural Economics, Oxford University Press (OUP), 2016, 98 (5), pp.1432-1449. 〈10.1093/ajae/aaw039〉

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Quality Standards, Industry Structure, and Welfare in a Global Economy (2016) Downloads
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:hal:journl:hal-01574927

DOI: 10.1093/ajae/aaw039

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2019-08-11
Handle: RePEc:hal:journl:hal-01574927