Working Paper: CEPR ID: DP6952
Authors: Richard Baldwin; Tadashi Ito
Abstract: 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.
Keywords: Heterogeneous Firms; Trade Model; Quality vs Price Competition
JEL Codes: F14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| geographical region (R10) | nature of exported goods (F10) |
| comparative advantage in raw materials (F11) | export composition (F10) |
| quality goods (L15) | distance coefficient (R12) |
| price goods (P22) | distance coefficient (R12) |
| economic structure (L16) | classification of export goods (F10) |
| distance-price relationship (R48) | competitiveness (L13) |
| export characteristics (F10) | overlap of quality competition goods (L15) |