Trade Liberalization, Quality, and Export Prices

Haichao Fan, Yao Li and Stephen Yeaple

No 2015-01, HKUST IEMS Working Paper Series from HKUST Institute for Emerging Market Studies

Abstract: This paper presents theory and evidence from highly disaggregated Chinese data that tariff reductions induce exporters to upgrade product quality. The paper documents two stylized facts and develops a simple analytic framework to predict that import tariff reductions induce an incumbent importer/exporter to increase the quality of its exports and to raise its export price in industries where the scope for quality differentiation is large while to lower its export price in industries where the scope for quality differentiation is small. The predictions are consistent with the stylized facts based on Chinese data and robust to various estimation specifications.

Keywords: trade liberalization; tariff; quality upgrading; export price; quality differentiation (search for similar items in EconPapers)
JEL-codes: F12 F14 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2015-01, Revised 2015-01
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (217)

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http://iems.ust.hk/assets/publications/working-papers-2015/iemswp2015-01.pdf First version, 2015 (application/pdf)

Related works:
Journal Article: Trade Liberalization, Quality, and Export Prices (2015)
Working Paper: Trade Liberalization, Quality, and Export Prices (2015)
Working Paper: Trade Liberalization, Quality, and Export Prices (2014)
Working Paper: Trade Liberalization, Quality, and Export Prices (2013)
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