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Quality and the Great Trade Collapse

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  • Chen, Natalie
  • Juvenal, Luciana

Abstract

We explore whether the global …nancial crisis has had heterogeneous e¤ects on traded goods di¤erentiated by quality. Combining a dataset of Argentinean …rm-level destination-speci…c wine exports with quality ratings, we show that higher quality exports grew faster before the crisis, but this trend reversed during the recession. Quantitatively, the e¤ect is large: up to nine percentage points di¤erence in trade performance can be explained by the quality composition of exports. This ‡ight from quality was triggered by a fall in aggregate demand, was more acute when households could substitute imports by domestic alternatives, and was stronger for smaller …rms’ exports.

Suggested Citation

  • Chen, Natalie & Juvenal, Luciana, 2015. "Quality and the Great Trade Collapse," Working Papers 231147, American Association of Wine Economists.
  • Handle: RePEc:ags:aawewp:231147
    DOI: 10.22004/ag.econ.231147
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    Cited by:

    1. Chen, Natalie & Juvenal, Luciana, 2019. "Markups, Quality, and Trade Costs," CAGE Online Working Paper Series 446, Competitive Advantage in the Global Economy (CAGE).
    2. Paulo Bastos & Joana Silva & Eric Verhoogen, 2018. "Export Destinations and Input Prices," American Economic Review, American Economic Association, vol. 108(2), pages 353-392, February.
    3. Jaimovich, Nir & Rebelo, Sergio & Wong, Arlene, 2019. "Trading down and the business cycle," Journal of Monetary Economics, Elsevier, vol. 102(C), pages 96-121.
    4. Di Ubaldo, Mattia, 2016. "Firms and trade in downturns," Economics PhD Theses 0416, Department of Economics, University of Sussex Business School.
    5. Mattia Di Ubaldo, 2015. "Product Cost-Share: a Catalyst of the Trade Collapse," Working Paper Series 8015, Department of Economics, University of Sussex Business School.
    6. A. M. M. Shahiduzzaman Quoreshi & Trudy-Ann Stone, 2019. "Do Global Value Chains Make Firms More Vulnerable to Trade Shocks?—Evidence from Manufacturing Firms in Sweden," Journal of Risk and Financial Management, MDPI, Open Access Journal, vol. 12(3), pages 1-16, September.

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    Keywords

    Demand and Price Analysis; Industrial Organization; International Relations/Trade;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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