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Premium Quality Selection, Sectoral Heterogeneity and Chinese Exports
Kneller Richard,
Yu Zhihong
Publication year2016
Publication title
review of international economics
Resource typeJournals
Abstract Recent models of international trade have identified product quality as an important determinant of bilateral trade flows. In this paper we examine the relationship between the characteristics of the export market and the aggregate quality of products using Chinese data. We find evidence that product unit values vary with standard gravity variables in a different manner across sectors of the Chinese economy and run contrary to earlier findings for the USA. These results are not compatible with existing heterogeneous firm trade models with constant mark‐up and the extension to include product quality. We construct a heterogeneous firm trade model with quality differences and spatial price discrimination, and show that the model provides plausible explanations for our empirical finds as well as other existing findings in the literature.
Subject(s)aggregate (composite) , artificial intelligence , bilateral trade , china , composite material , computer science , construct (python library) , econometrics , economics , epistemology , geometry , gravity model of trade , international trade , law , materials science , mathematics , mathematics education , microeconomics , philosophy , political science , product (mathematics) , programming language , quality (philosophy) , selection (genetic algorithm) , unit (ring theory)
SCImago Journal Rank0.513

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