IDEAS home Printed from https://ideas.repec.org/p/euf/ecopap/0528.html
   My bibliography  Save this paper

Quality in Exports

Author

Listed:
  • Hylke Vandenbussche

Abstract

The measurement of quality is a difficult task given that quality typically is an unobserved product characteristic. In this paper we develop a new “Quality Indicator” based on a structural model with an identifiable quality parameter. We follow the methodology proposed by Di Comité, Thisse and Vandenbussche (2014). This method offers an easy way to generate product-level quality ranks of exported products (manufacturing CN8). Moreover, it overcomes some of the flaws present in other quality measures. The quality metric used here is an improvement over existing ones, since it disentangles quality from cost and taste effects. A failure to do so, results in quality effects that are wrongly identified. Product-level export price data come from Comext (Eurostat) and cost data are obtained from the firm-level database ORBIS. When we apply this method on individual EU countries exports' of products to a common destination, we obtain distributions of "export quality" and its change over time in the period (2007-2011). A striking finding is the large extent of quality dynamics going on in the EU market. We show that quality can run in different direction than market share i.e. products with the largest market shares, need not have the highest quality. We also estimate a price elasticity of quality which is positive and significant. This suggests that quality upgrading results in a higher willingness to pay by consumers and therefore offers a way to escape cost competition.

Suggested Citation

  • Hylke Vandenbussche, 2014. "Quality in Exports," European Economy - Economic Papers 2008 - 2015 528, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecopap:0528
    as

    Download full text from publisher

    File URL: https://ec.europa.eu/economy_finance/publications/economic_paper/2014/ecp528_en.htm
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sarantis Kalyvitis, 2014. "Estimating the quality of Greek exports: a non-price based approach," Economic Bulletin, Bank of Greece, issue 40, pages 79-103, December.
    2. E. Dhyne & C. Duprez & C. Fuss, 2015. "Main CompNet research results," Economic Review, National Bank of Belgium, issue iii, pages 103-116, December.
    3. Stefan Schiman, 2015. "Verschuldungs- und Entschuldungsprozesse prägen die weltweiten Konjunkturaussichten. Mittelfristige Prognose der Weltwirtschaft bis 2019," WIFO Monatsberichte (monthly reports), WIFO, vol. 88(1), pages 39-50, January.
    4. Paul J. J. Welfens, 2020. "Trump’s Trade Policy, BREXIT, Corona Dynamics, EU Crisis and Declining Multilateralism," International Economics and Economic Policy, Springer, vol. 17(3), pages 563-634, July.
    5. Tony Irawan & Paul J.J. Welfens, 2016. "ICT Dynamics and Regional Trade Bias in Asia: Theory and Empirical Aspects," EIIW Discussion paper disbei224, Universitätsbibliothek Wuppertal, University Library.
    6. Lukas Menkhoff & Lucio Sarno & Maik Schmeling & Andreas Schrimpf, 2017. "Currency Value," The Review of Financial Studies, Society for Financial Studies, vol. 30(2), pages 416-441.
    7. Peneder, Michael & Rammer, Christian (ed.), 2018. "Measuring Competitiveness," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 181906.
    8. Sandra M. Leitner & Manuel Marcias & Daniel Mirza & Robert Stehrer & Roman Stöllinger, 2016. "The Future Development of EU Industry in a Global Context," wiiw Research Reports 409, The Vienna Institute for International Economic Studies, wiiw.
    9. Janger, Jürgen & Schubert, Torben & Andries, Petra & Rammer, Christian & Hoskens, Machteld, 2017. "The EU 2020 innovation indicator: A step forward in measuring innovation outputs and outcomes?," Research Policy, Elsevier, vol. 46(1), pages 30-42.
    10. Sarantis Kalyvitis, 2015. "Who exports high-quality products? Some empirical regularities from Greek exporting firms," Working Papers 201, Bank of Greece.
    11. Michael Peneder & Christian Rammer, 2018. "Measuring Competitiveness," WIFO Studies, WIFO, number 60838.
    12. Paul J. J. Welfens, 2019. "New Marshall-Lerner conditions for an economy with outward and two-way foreign direct investment," International Economics and Economic Policy, Springer, vol. 16(4), pages 593-617, October.
    13. Kristian Orsini & Arian Perić, 2021. "Understanding the Croatian Export Boom," European Economy - Economic Briefs 065, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    14. Zacharias Bragoudakis, 2014. "An empirical investigation of the relationship between unit labour cost and price developments: the case of Greece," Economic Bulletin, Bank of Greece, issue 40, pages 31-58, December.
    15. Athanasios Tagkalakis, 2014. "Tax buoyancy," Economic Bulletin, Bank of Greece, issue 40, pages 7-30, December.
    16. Paul J.J. Welfens, 2016. "Qualitätswettbewerb, Produktinnovationen und Schumpetersche Prozesse in internationalen Märkten," EIIW Discussion paper disbei220, Universitätsbibliothek Wuppertal, University Library.
    17. Tubadji, Annie & Nijkamp, Peter, 2017. "Green Online vs Green Offline preferences on local public goods trade-offs and house prices," Socio-Economic Planning Sciences, Elsevier, vol. 58(C), pages 72-86.
    18. Petros Migiakis, 2014. "The international financial markets as a source of funding for Greek non-financial corporations," Economic Bulletin, Bank of Greece, issue 40, pages 59-78, December.
    19. repec:wsr:wpaper:y:2018:i:185 is not listed on IDEAS

    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:euf:ecopap:0528. 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: ECFIN INFO (email available below). General contact details of provider: https://edirc.repec.org/data/dg2ecbe.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.