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Cristina Herghelegiu, ECARES Print
Friday, 22 February 2019, 12:15 - 13:15

Cristina Herghelegiu, ECARES

Do standards improve the quality of traded products?

Abstract: Quality-focused non-tariff measures are increasingly adopted by policy makers to address market failures. This paper tests for their selection and quality effects in a context of information asymmetry regarding product attributes. Our theory reveals that the enforcement of quality standards (QSs) induces the exit of low-quality firms but also that of some high-quality ones. The overall quality effect is therefore ambiguous. Using French firm data, we find that the QSs imposed by destination countries increase the probability, volume and value of exports of high-productivity medium-quality firms at the expense of low-productivity high-quality firms. QSs improve the average quality of exported consumption goods.

Location: R42.2.113
Contact: Nancy De Munck, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it