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Prices and Quality in International Trade

Abstract : The thesis uses information on prices to shed light on four questions. Chapter 1 provides new evidence on trade prices based on firm-level data from France. It finds firms charge higher free-on-board unit values on exports to more distant countries. This behavior explains most of the price premium paid by distant consumers, the rest being due to higher transport costs. This may be rationalized in models with additive rather than iceberg transport costs. Chapter 2 examines the impact of monetary unions on the integration of good markets. It shows the Euro has disproportionably affected large/more productive firms. Taking into account this heterogeneity, it finds a strong impact of the Euro on economic integration. Chapter 3 asks about the impact of low-wage countries' competition on the quality of high-wage countries' exports. Over 1995-2005, the mean quality of France's exports increased by 11%. Increasing pressures from low-wage countries have induced a reallocation of sales from low- to high-quality firms. Chapter 4 measures the sensitivity of domestic prices to changes in imported inputs' prices. The elasticity of domestic prices to imported inputs prices is 12%. The transmission is much lower among firms importing inputs from a related party. On average 9% of the volatility of production prices at the sectoral level is driven by changes in imported inputs' costs.
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  • HAL Id : pastel-00705253, version 1



Julien Martin. Prices and Quality in International Trade. Economics and Finance. Université Panthéon-Sorbonne - Paris I, 2011. English. ⟨pastel-00705253⟩



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