IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_11906.html
   My bibliography  Save this paper

Foreign Market Access’ Role for Export Quality

Author

Listed:
  • Dorothee Hillrichs

Abstract

This paper studies how foreign demand affects product quality specialization in international trade. In a model with non-homothetic CES preferences, firms choose quality levels based on global demand conditions, and countries with better access to high-income markets host more high-end producers. As a result, they export relatively more to rich destinations, where demand for quality is stronger. Using bilateral product-level trade data, I test this prediction by examining whether countries with higher “foreign market potential”— a trade-cost-weighted measure of access to rich consumers — export disproportionately more to higher-income destinations. A 10 percent increase in market potential raises the income elasticity of exports by 2.7 percentage points — three times the effect of domestic income. The findings highlight the role of economic integration across development levels in shaping specialization patterns.

Suggested Citation

  • Dorothee Hillrichs, 2025. "Foreign Market Access’ Role for Export Quality," CESifo Working Paper Series 11906, CESifo.
    • Handle: RePEc:ces:ceswps:_11906
    as

    Download full text from publisher

    File URL: https://www.ifo.de/DocDL/cesifo1_wp11906.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    market access; home market effects; non-homothetic preferences; quality;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_11906. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.