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Quality competition versus price competition goods: An empirical classification

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  • Richard E. Baldwin
  • Tadashi Ito

Abstract

Based on the recent trade models of the Heterogeneous Firms Trade (HFT) model and the Quality Heterogeneous Firms Trade (QHFT) model, we classify export goods (at the HS 6-digit level of disaggregation) by quality and price competition. We find a high proportions of quality-competition goods for the major EU countries and lower proportions for Canada, Australia and China. However, the overlap of these quality-competition goods is not large, which suggests that characteristics of export goods are substantially different across countries at the same HS 6-digit code.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14305.

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Date of creation: Sep 2008
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Publication status: published as E. Baldwin, Richard & Ito, Tadashi, 2011. "Quality Competition Versus Price Competition Goods: An Empirical Classification," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 26, pages 110-135.
Handle: RePEc:nbr:nberwo:14305

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  1. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
  2. Baldwin, Richard & Harrigan, James, 2007. "Zeros, Quality and Space: Trade Theory and Trade Evidence," CEPR Discussion Papers 6368, C.E.P.R. Discussion Papers.
  3. Lionel Fontagné & Guillaume Gaulier & Soledad Zignago, 2008. "Specialization across varieties and North-South competition," Economic Policy, CEPR & CES & MSH, vol. 23, pages 51-91, 01.
  4. Baldwin, Richard, 1988. "Hyteresis in Import Prices: The Beachhead Effect," American Economic Review, American Economic Association, vol. 78(4), pages 773-85, September.
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Cited by:
  1. Susan Houseman & Christopher Kurz & Paul Lengermann & Benjamin Mandel, 2010. "Offshoring bias in U.S. manufacturing: implications for productivity and value added," International Finance Discussion Papers 1007, Board of Governors of the Federal Reserve System (U.S.).
  2. Crozet, Matthieu & Head, Keith & Mayer, Thierry, 2009. "Quality Sorting And Trade: Firm-Level Evidence For French Wine," Working Papers 53883, American Association of Wine Economists.
  3. Benjamin R. Mandel, 2013. "Chinese exports and U.S. import prices," Staff Reports 591, Federal Reserve Bank of New York.
  4. Rollo, Valentina, 2012. "Determinants of Tanzanian export prices," Policy Research Working Paper Series 6225, The World Bank.
  5. Angela Cheptea & Lionel Fontagné & Soledad Zignago, 2012. "European Export Performance," Working Papers 2012-19, CEPII research center.
  6. Nanno Mulder & Rodrigo Paiilacar & Soledad Zignago, 2009. "Market Positioning of Varieties in World Trade: is Latin America Losing Out on Asia?," Working Papers 2009-09, CEPII research center.
  7. Michael J. Ferrantino & Robert M. Feinberg & Lauren Deason, 2012. "Quality Competition and Pricing-to-Market: A Unified Framework for the Analysis of Bilateral Unit Values," Southern Economic Journal, Southern Economic Association, vol. 78(3), pages 860-877, January.
  8. Robert C. Feenstra & John Romalis, 2012. "International Prices and Endogenous Quality," NBER Working Papers 18314, National Bureau of Economic Research, Inc.
  9. Michael Ferrantino & Robert M. Feinberg & Lauren Deason, 2009. "Quality competition, Pricing-To-Market and Non-Tariff measures: A Unified Framework For the Analysis of Bilateral Unit Values," Working Papers 2009-03, American University, Department of Economics.
  10. repec:spo:wpecon:info:hdl:2441/10148 is not listed on IDEAS
  11. repec:dgr:uvatin:2008048 is not listed on IDEAS
  12. Ito, Tadashi, 2012. "Revisiting the determinants of unit values," IDE Discussion Papers 356, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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