Entry into Export Markets and Product Quality Differences

Roberto Alvarez and Rodrigo Rodrigo Fuentes.
Authors registered in the RePEc Author Service: Rodrigo Fuentes

No 367, Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile.

Abstract: Using a rich dataset of Chilean exporters, we analyze several issues related to the relationship between entry into export markets and product quality. We find that every year a large number of new exporting relationships are initiated, but the survival rate of these entries is very low and declines over time. Using unit values as a proxy for product quality, our estimations show that entry is generally associated with higher product quality. This higher product quality, however, tends to reduce over time and eventually disappears three years after entry. To better identify this effect, we explore whether there are systematic differences across sectors. As expected, for sectors in which quality differentiation may be important, our findings reveal that reference-price and differentiated products show a higher price in the year of entry and it takes longer to converge to the incumbent prices. These results hold after controlling for potential sample selection bias.

Keywords: Unit-value exports; product quality; price dynamics (search for similar items in EconPapers)
JEL-codes: F14 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-ind, nep-int and nep-lam
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Entry into Export Markets and Product Quality Differences (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ioe:doctra:367

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