Quality and the Great Trade Collapse
Electronic Access:
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Summary:
We explore whether the global financial crisis has had heterogeneous effects on traded goods differentiated by quality. Combining a dataset of Argentinean firm-level destination-specific wine exports with quality ratings, we show that higher quality exports grew faster before the crisis, but this trend reversed during the recession. Quantitatively, the effect is large: up to nine percentage points difference in trade performance can be explained by the quality composition of exports. This flight from quality was triggered by a fall in aggregate demand, was more acute when households could substitute imports by domestic alternatives, and was stronger for smaller firms' exports.
Series:
Working Paper No. 2016/030
Subject:
Export performance Exports Financial crises Imports International trade National accounts Real exports
English
Publication Date:
February 18, 2016
ISBN/ISSN:
9781498347587/1018-5941
Stock No:
WPIEA2016030
Pages:
59
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