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Minimum quality standards and exports

Listed author(s):
  • Birg, Laura
  • Voßwinkel, Jan S.

This paper studies the interaction of a minimum quality standard and exports in a vertical product differentiation model when firms sell global products. If exante quality of foreign firms is lower (higher) than the quality of exporting firms, a mild minimum quality standard in the home market hinders (supports) exports. The minimum quality standard increases quality in both markets. A welfare maximizing minimum quality standard is always lower under trade than under autarky. A Minimum quality standard reduces profits for the exporting firm. It increases domestic welfare, but reduces welfare in the export market.

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File URL: https://www.econstor.eu/bitstream/10419/110926/1/827348169.pdf
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Paper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 248.

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Date of creation: 2015
Handle: RePEc:zbw:cegedp:248
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Web page: http://www.cege.wiso.uni-goettingen.de/

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  1. Sofronis Clerides & Costas Hadjiyiannis, 2004. "Trade-Inducing Quality Standards for Used Durables," University of Cyprus Working Papers in Economics 5-2004, University of Cyprus Department of Economics.
  2. Scarpa, Carlo, 1998. "Minimum quality standards with more than two firms1," International Journal of Industrial Organization, Elsevier, vol. 16(5), pages 665-676, September.
  3. Crampes, Claude & Hollander, Abraham, 1995. "Duopoly and quality standards," European Economic Review, Elsevier, vol. 39(1), pages 71-82, January.
  4. Dimitra Petropoulou, 2013. "Vertical product differentiation, minimum quality standards, and international trade," Oxford Economic Papers, Oxford University Press, vol. 65(2), pages 372-393, April.
  5. Kenneth Baltzer, 2011. "Minimum Quality Standards and International Trade," Review of International Economics, Wiley Blackwell, vol. 19(5), pages 936-949, November.
  6. Stéphan Marette & John Beghin, 2017. "Are Standards Always Protectionist?," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 11, pages 179-192 World Scientific Publishing Co. Pte. Ltd..
  7. Leland, Hayne E, 1979. "Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1328-1346, December.
  8. Matthieu Crozet & Keith Head & Thierry Mayer, 2012. "Quality Sorting and Trade: Firm-level Evidence for French Wine," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 609-644.
  9. Stefan Lutz & Mario Pezzino, 2012. "International Strategic Choice of Minimum Quality Standards and Welfare," Journal of Common Market Studies, Wiley Blackwell, vol. 50(4), pages 594-613, 07.
  10. Ecchia, Giulio & Lambertini, Luca, 1997. "Minimum Quality Standards and Collusion," Journal of Industrial Economics, Wiley Blackwell, vol. 45(1), pages 101-113, March.
  11. Spencer Henson & Steven Jaffee, 2008. "Understanding Developing Country Strategic Responses to the Enhancement of Food Safety Standards," The World Economy, Wiley Blackwell, vol. 31(4), pages 548-568, 04.
  12. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
  13. Mangelsdorf, Axel & Portugal-Perez, Alberto & Wilson, John S., 2012. "Food standards and exports: evidence for China," World Trade Review, Cambridge University Press, vol. 11(03), pages 507-526, July.
  14. John Hudson & Philip Jones, 2003. "International trade in 'quality goods': signalling problems for developing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(8), pages 999-1013.
  15. Uri Ronnen, 1991. "Minimum Quality Standards, Fixed Costs, and Competition," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 490-504, Winter.
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