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- Title
Do standards improve the quality of traded products?
- Authors
Disdier, Anne‐Célia; Gaigné, Carl; Herghelegiu, Cristina
- Abstract
We examine whether standards raise the quality of traded products. Matching a panel of French firm–product–destination export data with a data set on sanitary and phytosanitary measures and technical barriers to trade, we find that such quality standards enforced on products by destination countries: (i) favour the export probability of high‐quality firms provided that their productivity is high enough, (ii) raise the export sales of high‐productivity, high‐quality firms at the expense of low‐productivity and low‐quality firms and (iii) increase the quality supplied by firms if their productivity is high enough. We then develop a simple new trade model under uncertainty about product quality in which heterogeneous firms can strategically invest in quality signalling to rationalize these empirical results on quality and selection effects.
- Subjects
PRODUCT quality; PHYTOSANITATION; QUALITY standards; TRADE regulation; EXPORT sales contracts
- Publication
Canadian Journal of Economics, 2023, Vol 56, Issue 4, p1238
- ISSN
0008-4085
- Publication type
Article
- DOI
10.1111/caje.12678