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Minimum quality standards and exports

Author

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  • Birg, Laura
  • Voßwinkel, Jan S.

Abstract

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.

Suggested Citation

  • Birg, Laura & Voßwinkel, Jan S., 2015. "Minimum quality standards and exports," University of Göttingen Working Papers in Economics 248, University of Goettingen, Department of Economics.
    • Handle: RePEc:zbw:cegedp:248
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    References listed on IDEAS

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    Cited by:

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    2. Peter Michaelis & Thomas Ziesemer, 2022. "Minimum quality standards and benchmarking in differentiated duopoly," The Japanese Economic Review, Springer, vol. 73(3), pages 515-537, July.
    3. Alexis NANKAP SEUJIB & DONTSI, 2022. "Les déterminants de la non-conformité des produits agricoles subsahariens aux normes internationales," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 56, pages 77-90.

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    More about this item

    Keywords

    minimum quality standard; vertical differentiation; exports;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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