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Determinants of Trade: the Role of Innovation in Presence of Quality Standards

Author

Listed:
  • Maria Cipollina

    () (Università degli Studi del Molise)

  • Federica Demaria

    () (Università degli Studi del Molise
    INRA UMR MOISA)

  • Filomena Pietrovito

    () (Università degli Studi del Molise)

Abstract

Abstract This paper analyses the role that quality standards and innovation play on trade volume, by using a gravity model. The role of innovative activity and quality standards in enhancing trade performance is widely accepted in the literature. However, in this paper, we argue that the net effect of quality standards on trade is affected by the exporter’s ability to innovate and comply with these requirements. In particular, by using a sample of 60 exporting countries and 57 importing countries, for a wide range of 26 manufacturing industries over the period 1995–2000, we show that the most innovative industries are more likely to enhance the overall quality of exports, and then gain a competitive advantage. We also find that this effect depends on the level of technology intensity at industry-level and on the level of economic development of exporting country.

Suggested Citation

  • Maria Cipollina & Federica Demaria & Filomena Pietrovito, 2016. "Determinants of Trade: the Role of Innovation in Presence of Quality Standards," Journal of Industry, Competition and Trade, Springer, vol. 16(4), pages 455-475, December.
  • Handle: RePEc:kap:jincot:v:16:y:2016:i:4:d:10.1007_s10842-016-0234-z
    DOI: 10.1007/s10842-016-0234-z
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    References listed on IDEAS

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    Cited by:

    1. Susanne Fricke & Geoffrey Chapman, 2017. "The Role of Standards in North-South Trade: The Case of Agricultural Exports from Sub-Saharan African Countries to the EU," Jena Economic Research Papers 2017-011, Friedrich-Schiller-University Jena.
    2. repec:mje:mjejnl:v:12:y:2017:i:2:p:141-150 is not listed on IDEAS
    3. repec:mje:mjejnl:v:13:y:2017:i:2:p:141-150 is not listed on IDEAS

    More about this item

    Keywords

    Non-tariff measures; Quality standards; Innovation; Gravity model; Trade flows;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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