Do Standards Improve the Quality of Traded Products?

Les normes améliorent-elles la qualité des produits importés ?

Carl Gaigne, Anne-Célia Disdier and Cristina Herghelegiu
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Cristina Herghelegiu: European Commission [Brussels]

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Abstract: We examine whether standards raise the quality of traded products by correcting market failures associated with information asymmetry on product attributes. Matching a panel of French firmproduct-destination export data with a dataset on sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBTs), we find that such quality standards enforced on products by destination countries: (i) favor the export probability of high-quality firms provided that their productivity is high enough; (ii) raise the export sales of high-productivity high-quality firms at the expense of low-productivity and low-quality firms; (iii) improve the average quality of consumption goods exported by France. We then develop a simple new trade model under uncertainty about product quality, in which heterogeneous firms can strategically invest in quality signaling, to rationalize these empirical results on quality and selection effects.

Keywords: Heterogeneity; Firm exports; Quality standards; Information asymmetry; Product quality; Exportation; Normes de qualité; Asymétrie d’information; Qualité des produits; Hétérogénéité (search for similar items in EconPapers)
Date: 2021-12
New Economics Papers: this item is included in nep-agr and nep-int
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03623098v1
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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? (2020)
Working Paper: Do Standards Improve the Quality of Traded Products? (2018)
Working Paper: Do Standards Improve the Quality of Traded Products? (2018)
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