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Indian buyers in global markets: Quality, prices, and productivity

Author

Listed:
  • M.A. Anderson
  • M.H. Davies
  • J.E. Signoret
  • S.L.S. Smith

Abstract

We examine import prices paid by direct-sourcing Indian manufacturing firms in the early 2000s using a unique data set that matches firm characteristics with product and source-country trade data, offering a theoretical and empirical extension of Halpern and Koren (2007). We find that import prices are positively associated with firm productivity, distance from source-country, and source-country GDP per capita, and negatively associated with source-country remoteness, an effect we attribute to the higher scope for quality differentiation in less remote locations. Further, we find that source-country characteristics matter more, and cost factors less, for differentiated than for non-differentiated goods.

Suggested Citation

  • M.A. Anderson & M.H. Davies & J.E. Signoret & S.L.S. Smith, 2021. "Indian buyers in global markets: Quality, prices, and productivity," CAMA Working Papers 2021-42, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2021-42
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    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2021-04/42_2021_anderson_davies_signoret_smith.pdf
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    More about this item

    Keywords

    Importers; Firm-level data; Pricing; Input quality; productivity; India;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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