Quality Upgrading, Competition and Trade Policy: Evidence from the Agri-Food Sector

This paper analyzes the extent to which the reduction of import tariffs ‒ as a measure of import competition ‒ affects the quality upgrading of the food products exported to the EU. This relationship is studied within a ‘distance to the frontier’ model (Aghion et al., 2005) who predicts a non-monotonic relation between competition and innovation. Quality is inferred from trade data using the Khandelwal (2010) method. The results show strong support for the existence of an non-monotonic relationship between competition and quality upgrading, with varieties close to the world frontier more likely to upgrade quality in response to an increase in import competition.


Issue Date:
2014-08
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/182756
Total Pages:
14




 Record created 2017-04-01, last modified 2017-08-27

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