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Quality upgrading and price heterogeneity: Evidence from Brazilian exporters

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  • Flach, Lisandra

Abstract

This paper uses producer quality information to investigate whether firms segment markets and adapt product quality and prices according to destination country characteristics. Using detailed price and quality data for Brazilian exporters over time, the results document quality-based market segmentation, by which firms raise quality and prices to high-income destinations. A major exchange rate shock and further robustness analysis reinforce the hypothesis that adjustments in quality and prices happen within the firm and that differences in prices across destinations may be driven by investments in product quality and demand for high quality.

Suggested Citation

  • Flach, Lisandra, 2016. "Quality upgrading and price heterogeneity: Evidence from Brazilian exporters," Journal of International Economics, Elsevier, vol. 102(C), pages 282-290.
  • Handle: RePEc:eee:inecon:v:102:y:2016:i:c:p:282-290
    DOI: 10.1016/j.jinteco.2016.07.005
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    More about this item

    Keywords

    Export prices; Quality upgrading; Innovation; Market segmentation;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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