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Quality Upgrading, Competition and Trade Policy: Evidence from the Agri-Food Sector

Listed author(s):
  • Curzi, Daniele
  • Raimondi, Valentina
  • Olper, Alessandro

This paper analyzes the extent to which the reduction of import tariffs ‒ as a measure of import competition ‒ affects the quality upgrading of the food products exported to the EU. This relationship is studied within a ‘distance to the frontier’ model (Aghion et al., 2005) who predicts a non-monotonic relation between competition and innovation. Quality is inferred from trade data using the Khandelwal (2010) method. The results show strong support for the existence of an non-monotonic relationship between competition and quality upgrading, with varieties close to the world frontier more likely to upgrade quality in response to an increase in import competition.

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File URL: http://purl.umn.edu/152387
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Paper provided by International Agricultural Trade Research Consortium in its series Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain with number 152387.

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Date of creation: Jun 2013
Handle: RePEc:ags:iatr13:152387
Contact details of provider: Web page: http://iatrcweb.org/

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