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Export behavior of Italian food firms: Does product quality matter?

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  • Curzi, Daniele
  • Olper, Alessandro

Abstract

Using firm-level data we investigate the export behavior of Italian food firms, focusing on the link between total factor productivity (TFP), product quality, and export across heterogeneous destinations. We test the main predictions of an international trade model based on firm heterogeneity in product quality and non-homothetic preferences in consumption. In this setting, the firm’s export intensity should be increasing in the per-capita income of foreign destinations, and the effect should be largely driven by firms’ heterogeneity in product quality. Using different measures of revenue-TFP, and different proxies for product quality, we find strong support for the main model predictions. Moreover, consistent with the Alchian–Allen effect, we find a positive relationship between the quality of exported products and the distance of destination countries.

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Bibliographic Info

Article provided by Elsevier in its journal Food Policy.

Volume (Year): 37 (2012)
Issue (Month): 5 ()
Pages: 493-503

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Handle: RePEc:eee:jfpoli:v:37:y:2012:i:5:p:493-503

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Web page: http://www.elsevier.com/locate/foodpol

Related research

Keywords: Firms heterogeneity; Total factor productivity; Quality; Export behavior; Food industry;

References

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Cited by:
  1. Olper, Alessandro & Pacca, Lucia & Curzi, Daniele, 2013. "Trade, Import Competition and Productivity Growth In the Food Industry," Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152385, International Agricultural Trade Research Consortium.
  2. Curzi, Daniele & Raimondi, Valentina & Olper, Alessandro, 2013. "Quality Upgrading, Competition and Trade Policy: Evidence from the Agri-Food Sector," Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152386, International Agricultural Trade Research Consortium.

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