Input-trade liberalization, export prices and quality upgrading

If trade barriers are managed by inefficient institutions, trade liberalization can lead to greater-than-expected gains. We examine Chinese textile and clothing exports before and after the elimination of externally imposed export quotas. Both the surge in export volume and the decline in export prices following quota removal are driven by net entry. This outcome is inconsistent with a model in which quotas are allocated based on firm productivity, implying misallocation of resources. Removing this misallocation accounts for a substantial share of the overall gain in productivity associated with quota removal. (JEL F13, F14, L67, O14, O19, P23, P33)

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SKILL-BIASED EXPORT GROWTH: ACCOUNTING FOR THE CHANGES IN LABOR CONTENTS ACROSS ETHNIC GROUPS IN MALAYSIA (1991–2000)

The Singapore Economic Review ◽

10.1142/s0217590813500100 ◽

2013 ◽

Vol 58 (02) ◽

pp. 1350010

Author(s):

M. YUSOF SAARI ◽

JIANSUO PEI

Keyword(s):

Trade Liberalization ◽

Ethnic Groups ◽

Decomposition Analysis ◽

Growth Accounting ◽

Skilled Labor ◽

Structural Decomposition Analysis ◽

Quality Upgrading ◽

Productivity Differentials ◽

Trade Growth

This paper quantifies the extent to which trade liberalization in Malaysia between 1991 and 2000 has contributed to the expansion in the most skilled labor, which in turn can validate the trade-enhanced quality upgrading hypothesis. By using an input–output structural decomposition analysis (SDA), results confirm the theoretical predication that skills help to upgrade the quality of exporting commodities, by documenting that trade growth is associated with increases in the use of the higher skilled labor. We observe that Chinese and Indian ethnic groups contribute the most to the quality upgrading of exporting commodities, more so than the Malays, which imply productivity differentials among the ethnic groups.

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Judicial quality, input customisation, and trade margins: the role of product quality

The Economic Journal ◽

10.1093/ej/ueab098 ◽

2021 ◽

Author(s):

Xiaomin Cui ◽

Miaojie Yu ◽

Rui Zhang

Keyword(s):

Product Quality ◽

Import Prices ◽

Export Prices ◽

Ricardian Model ◽

Quality Upgrading

Abstract We study how the contracting environment affects the quality of trade. A better contracting environment not only induces specialisations in industries intensively using customised inputs, but also causes quality upgrading of domestic varieties and tougher competition in these industries. We incorporate these effects into a Ricardian model with customised input and product quality. Our model predicts that better judicial quality raises a country’s import prices and quality more in contract-intensive products, but has no impacts on its export prices or quality. We empirically confirm these predictions, and find that rising judicial quality is associated with increasing specialisations in contract-intensive industries.

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Trade Liberalization, Quality, and Export Prices

Review of Economics and Statistics ◽

10.1162/rest_a_00524 ◽

2015 ◽

Vol 97 (5) ◽

pp. 1033-1051 ◽

Cited By ~ 111

Author(s):

Haichao Fan ◽

Yao Amber Li ◽

Stephen R. Yeaple

Keyword(s):

Trade Liberalization ◽

Export Prices

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Trade, Quality Upgrading, and Input Linkages: Theory and Evidence from Colombia

The American Economic Review ◽

10.1257/aer.20150796 ◽

2018 ◽

Vol 108 (1) ◽

pp. 109-146 ◽

Cited By ~ 25

Author(s):

Ana Cecília Fieler ◽

Marcela Eslava ◽

Daniel Yi Xu

Keyword(s):

International Trade ◽

Trade Liberalization ◽

Economies Of Scale ◽

Quantitative Model ◽

Manufacturing Firms ◽

Skill Intensity ◽

Export Expansion ◽

Quality Technology ◽

Quality Upgrading

A quantitative model brings together theories linking international trade to quality, technology, and demand for skills. Standard effects of trade on importers and exporters are magnified through domestic input linkages. We estimate the model with data from Colombian manufacturing firms before the 1991 trade liberalization. A counterfactual trade liberalization is broadly consistent with post-liberalization data. It increases skill intensity from 12 to 16 percent, while decreasing sales. Imported inputs, estimated to be of higher quality, and domestic input linkages are quantitatively important. Economies of scale, export expansion, and reallocation of production are small and cannot explain post-liberalization data. (JEL F14, F16, J24, L60, O14, O19, O33)

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