American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Export Destinations and Input Prices
American Economic Review
vol. 108,
no. 2, February 2018
(pp. 353–92)
Abstract
This paper examines the relationship between the destination of exports and the input prices paid by firms, using detailed customs and firm-product-level data from Portugal. Both ordinary least squares regressions and an instrumental-variable strategy using exchange-rate movements (interacted with indicators for initial exports) as a source of variation in destinations indicate that exporting to richer countries leads firms to pay higher prices for inputs, other things equal. The results are supportive of what we call the income-based quality-choice channel: selling to richer destinations leads firms to raise the average quality of goods they produce and to purchase higher-quality inputs.Citation
Bastos, Paulo, Joana Silva, and Eric Verhoogen. 2018. "Export Destinations and Input Prices." American Economic Review, 108 (2): 353–92. DOI: 10.1257/aer.20140647Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- F14 Empirical Studies of Trade
- F31 Foreign Exchange
- L15 Information and Product Quality; Standardization and Compatibility