DP6952 Quality Competition Versus Price Competition Goods: An Empirical Classification
|Author(s):||Richard Baldwin, Tadashi Ito|
|Publication Date:||September 2008|
|Keyword(s):||heterogeneous firms trade model, Quality vs Price competition|
|Programme Areas:||International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=6952|
Based on the recent trade models of the Heterogeneous Firms Trade (HFT) model and the Quality Heterogeneous Firms Trade (QHFT) model, we classify export goods (at the HS 6-digit level of disaggregation) by quality and price competition. We find a high proportions of quality-competition goods for the major EU countries and lower proportions for Canada, Australia and China. However, the overlap of these quality-competition goods is not large, which suggests that characteristics of export goods are substantially different across countries at the same HS 6-digit code.