Download or read book Markups Quality and Trade Costs written by Natalie Chen and published by International Monetary Fund. This book was released on 2020-02-21 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate theoretically and empirically how exporters adjust their markups across destinations depending on bilateral distance, tariffs, and the quality of their exports. Under the assumption that trade costs are both ad valorem and per unit, our model predicts that markups rise with distance and fall with tariffs, but these effects are heterogeneous and are smaller in magnitude for higher quality exports. We find strong support for the predictions of the model using a unique data set of Argentinean firm-level wine exports combined with experts wine ratings as a measure of quality.
Download or read book Markups Quality and Trade Costs written by and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Quality Trade and Exchange Rate Pass Through written by Natalie Chen and published by International Monetary Fund. This book was released on 2014-03-12 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates theoretically and empirically the heterogeneous response of exporters to real exchange rate fluctuations due to product quality. Our model shows that the elasticity of demand perceived by exporters decreases with a real depreciation and with quality, leading to more pricing-to-market and to a smaller response of export volumes to a real depreciation for higher quality goods. We test the proposed theory using a highly disaggregated Argentinean firm-level wine export dataset between 2002 and 2009 combined with experts wine rankings as a measure of quality. The model predictions find strong support in the data and the results are robust to different measures of quality, samples, specifications, and to the potential endogeneity of quality.
Download or read book Trade Costs and Quality written by Eric H. Tseng and published by . This book was released on 2016 with total page 112 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first chapter examines the role that trade costs and sunk investment costs play in affecting firm production decisions with respect to quality, market selection, and export selection. Deriving a complete theoretical model that integrates the quality of intermediate inputs and outputs in a food and agricultural setting, this analysis finds that falling trade costs should induce the production of higher-quality goods, the sorting of the most productive non-exporters into the export market, and the least productive firms to select out of the market. Additionally, how sunk investment costs to upgrade quality affect market and export selection depends on the parameters of the capability distribution (i.e., market structure) and the structure of fixed costs. These results are translated into an empirical framework to show strong evidence for firms utilizing input complementarity in production and the impact of sunk investment costs on a firm’s quality choices, market selection and export selection. Some evidence for the role of trade costs on quality choices, market selection, and export selection is presented. The second chapter analyzes the firm’s reshoring choice from a theoretical perspective. Due to uncertainty embedded in the contract that previously fragmented production of the intermediate input, it is possible for final good producers to decide that producing upstream goods domestically is more profitable despite the cost disadvantage. Through this offshoring and reshoring framework, the final good producer’s reshoring decision is analyzed in detail to show when the firm reshores the production of the intermediate input and the economic welfare impact of such a decision. Results show that the quality distortion and welfare loss seen in the offshoring and free-trade equilibrium outcome can be resolved entirely through reshoring. However, reshoring cannot resolve the quantity holdup problem and the resulting welfare loss, even when investments to reduce cost disadvantages and government subsidy are included. Examining the government subsidy problem further reveals that the government may subsidize more or less under political economy, since the cost of the policy’s impact on welfare motivates the government’s decision. The third chapter examines the impact of trade costs and financial constraints on firm performance, as measured by revenue per worker. A heterogeneous-firms framework is used to analyze the impact of these variables by endogenizing the firm’s technological choice, showing that when trade costs fall and when financial constraints loosen, firm performance as measured by revenue per worker will improve for the remaining firms in the market. These theoretical results are translated into an empirical framework that tests out these hypotheses in a cross-sectional firm-level data set from multiple countries, an empirical extension that has not been seen in the prior literature. In addition, this analysis notably introduces firm-level measures and predictors for their level of financial constraints as opposed to the more common industrial-level measures. Overall, the econometric analysis shows reasonable support for the model across six separate specifications, but this is heavily dependent on introducing or excluding various country- and industry-specific effects and additional firm attributes as controls.
Download or read book Export Quality and Trade Costs written by Mastooreh Eshraghi and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Heterogeneous Quality Firms and Trade Costs written by Matthias Helble and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Institutional Quality Trade Costs and Comparative Advantage KIEP Working Paper 19 06 written by Sangkyom KIM and published by . This book was released on 2019-10 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Heterogeneous Quality Firms And Trade Costs written by Matthias Helble and published by . This book was released on 2008 with total page 82 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book International Trade Trade Costs and Quality of Traded Commodities written by Viola Lamani and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The objective of this dissertation is to identify the effects of trade costs on the quality structure of international trade flows. In chapter one we empirically analyze the determinants of Cognac export flows and emphasize the role of trade costs. We show that, as with other luxury products, the elasticity of Cognac exports to distance is negative and relatively small. Meanwhile, average customs duties do not have a significant impact on the intensive margin, but we find that they negatively affect the probability of trade, after correcting for an endogeneity bias. In chapter two we empirically test the validity of the Alchian and Allen effect that states that per-unit charges increase the relative demand of higher quality goods. We use data on Cognac exports by quality designations. The measure of Cognac quality is objective and invariant over time. Our results show that distance and specific duties increase the share of exports of higher quality Cognac. We also examine the impact of containerization on Cognac's quality mix from 1967 to 2013. In chapter three we build a theoretical model of a North-South duopoly where firms compete in prices on both markets. We use this framework to study the impact of several trade policy instruments (import tariff, quota and quality standard) on the product R&D investment of the Northern firm. Our results show that the Northern firm's R&D expenditures increase with each policy instrument except for the import quota.
Download or read book Digital Intensity Trade Costs and Exports Quality Upgrading written by Raphaël Chiappini and published by . This book was released on 2022 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Pass Through of Trade Costs to U S Import Prices written by HAKAN YILMAZKUDAY and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper measures the pass-through of trade costs into U.S. import prices by using actual data on duties/tariffs and freight-related costs. The key innovation is to decompose the indirect effects of trade costs (on prices) into the effects on markups, quality and productivity while measuring/interpreting the pass-through of trade costs into welfare. Robust to the consideration of variable versus constant markups, there is evidence for incomplete pass-through, mostly due to the negative indirect effects of trade costs on marginal costs, suggesting that lower trade costs are associated with imports that have higher marginal costs; markups are affected relatively less. When the effects of trade costs on marginal costs are further decomposed into their components, the positive contribution of quality dominates in all cases, followed by the negative effects of productivity, suggesting that lower trade costs are associated with higher-quality imports that have been produced with lower productivity.
Download or read book Trade Costs as Determinants of International Trade written by Matthias Helble and published by . This book was released on 2007 with total page 167 pages. Available in PDF, EPUB and Kindle. Book excerpt: The laste chapter examines the impact of a reform of a preferential market access scheme on textiles and clothing exports of Least Developed Countries. It yields evidence that the reform substantially improved these countries' exports.
Download or read book Quality Polarization and International Trade written by Till F. Hollstein and published by . This book was released on 2018 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper builds a model that examines firm heterogeneity across two dimensions: productivity and quality. We show that when firms are able to choose their input quality and there exists a negative relationship between a firm's product quality and their marginal cost, this can lead to a non-unimodal distribution of quality across firms. Trade liberalization, represented by reductions in trade costs, and stronger vertical linkages, represented by an increase in the cost share of intermediate goods, shift the distribution of firms towards the modes of the distribution, which we call quality polarization. With this approach, we are able to explain empirical trade patterns relating to firm size, prices, and quality of exported goods.
Download or read book Institutional Quality Trade Costs and Comparative Advantage written by Sang-kyom Kim and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Institutional Quality Trade Costs and Comparative Advantage written by Sangkyom Kim and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Earlier works derive empirical implications that institutional quality is very influential as a source of comparative advantage in industries requiring relationship-specific investment from the supplier. However, as earlier studies focus on investigating the impact of institution on the efficiency of the producer, only the exporter's institution is considered. In contrast, we attempt to identify the impacts of the quality of institution, of both exporters and importers, on trade costs, that are different across country-pairs. To check the problem of measuring trade costs, we use two alternative measures of trade costs, i.e. CIF/FOB ratio and the relative measure of trade costs proposed by Novy (2013). Using the Eora global supply chain database covering 187 countries for 11 primary and manufacturing industries and four years, 2000, 2005, 2010 and 2015, we calculate a CIF/FOB ratio and the relative trade costs suggested by Novy (2013) which are used as a proxy variable for trade costs. At the country level, we find that the institutional quality of exporter and importer is negatively associated with trade costs and trade costs increase as disparity between two countries' institutional quality increases. At the country-industry level, we find that a country-pair with better legal institution has lower trade costs in industries for which a hold-up problem is important. This result is robust to the alternative measure of trade costs suggested by Novy (2013). However, an analysis on the impact of institutional differences on trade costs yields mixed results. Therefore we do not conclude that the similarity of institutional quality between two countries is associated with lower bilateral trade costs.
Download or read book Infrastructure s Role in Lowering Asia s Trade Costs written by Douglas H. Brooks and published by Edward Elgar Publishing. This book was released on 2009-01-30 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: Much of the analysis of infrastructure's impact on trade costs focuses on conditions in developed countries. This book makes an invaluable contribution to our understanding by examining the situation in developing Asia, the world's most populous and fastest growing region. This study analyzes and draws policy implications from infrastructure's central role in lowering Asia's trade costs. Infrastructure is shown to be a cost-effective means of lowering trade costs and thereby promoting regional growth and integration. This book combines thematic and country studies, while breaking new ground in.
Download or read book A Practical Guide to Trade Policy Analysis written by Marc Bacchetta and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Trade flows and trade policies need to be properly quantified to describe, compare, or follow the evolution of policies between sectors or countries or over time. This is essential to ensure that policy choices are made with an appropriate knowledge of the real conditions. This practical guide introduces the main techniques of trade and trade policy data analysis. It shows how to develop the main indexes used to analyze trade flows, tariff structures, and non-tariff measures. It presents the databases needed to construct these indexes as well as the challenges faced in collecting and processing these data, such as measurement errors or aggregation bias. Written by experts with practical experience in the field, A Practical Guide to Trade Policy Analysis has been developed to contribute to enhance developing countries' capacity to analyze and implement trade policy. It offers a hands-on introduction on how to estimate the distributional effects of trade policies on welfare, in particular on inequality and poverty. The guide is aimed at government experts engaged in trade negotiations, as well as students and researchers involved in trade-related study or research. An accompanying DVD contains data sets and program command files required for the exercises. Copublished by the WTO and the United Nations Conference on Trade and Development
