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Determinants of trade: the role of innovation in presence of quality standards

Author

Listed:
  • Maria Cipollina

    (Molise University)

  • Federica Demaria

    (UMR MOISA - Marchés, Organisations, Institutions et Stratégies d'Acteurs - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - INRA - Institut National de la Recherche Agronomique - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques)

  • Filomena Pietrovito

    (Molise University)

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 depends on the producers' 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 sectors 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 sector-level and on the level of economic development of exporting country.

Suggested Citation

  • Maria Cipollina & Federica Demaria & Filomena Pietrovito, 2015. "Determinants of trade: the role of innovation in presence of quality standards," Working Papers hal-01259114, HAL.
  • Handle: RePEc:hal:wpaper:hal-01259114
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    1. Asongu, Simplice A & Odhiambo, Nicholas M, 2022. "The paradox of governance and natural resource rents in Sub-Saharan Africa," Working Papers 29008, University of South Africa, Department of Economics.
    2. 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.
    3. Simplice A. Asongu & Thales P. Yapatake Kossele & Joseph Nnanna, 2021. "Not all that glitters is gold: political stability and trade in Sub-Saharan Africa," Research Africa Network Working Papers 21/005, Research Africa Network (RAN).
    4. Shinyekwa, Isaac M.B. & Lakuma, Paul Corti & Munu, Martin Luther, 2021. "Leveraging Innovation to Increase Intra-COMESA Trade," African Journal of Economic Review, African Journal of Economic Review, vol. 10(1), December.
    5. repec:mje:mjejnl:v:12:y:2017:i:2:p:141-150 is not listed on IDEAS
    6. Francisco Moris, 2018. "Intangibles Trade and MNEs: Supply-Chain Trade in R&D Services and Innovative Subsidiaries," Journal of Industry, Competition and Trade, Springer, vol. 18(3), pages 349-371, September.
    7. Serhiy Moroz & Khabibullo Pirmatov & Elena Horska & Ludmila Nagyova & Zuzana Polakova, 2017. "The Effect of Selected Economic Indicators on Export of Goods of Regions of Ukraine," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 13(2), pages 141-150.

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    More about this item

    Keywords

    gravity model; trade policies; non-tariff measures; innovation; trade flows;
    All these keywords.

    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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