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Import Competition and Quality Upgrading

Author

Listed:
  • Mary Amiti

    (Federal Reserve Bank of New York and CEPR)

  • Amit K. Khandelwal

    (Columbia Business School and NBER)

Abstract

The production of high-quality goods is often viewed as a precondition for export success and economic development. We provide the first evidence that countries' import tariffs affect the rate at which they upgrade product quality. Our analysis uses highly disaggregated data covering exports from 56 countries across 10,000 products to the United States using a novel approach to measure quality. As predicted by distance-to-the-frontier models, we find that lower tariffs are associated with quality upgrading for products close to the world quality frontier, whereas lower tariffs discourage quality upgrading for products distant from the frontier. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Mary Amiti & Amit K. Khandelwal, 2013. "Import Competition and Quality Upgrading," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 476-490, May.
  • Handle: RePEc:tpr:restat:v:95:y:2013:i:2:p:476-490
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    More about this item

    Keywords

    quality upgrading; import competition; proximity to frontier; growth politics;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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