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Do standards improve the quality of traded products?

Author

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  • Anne‐Célia Disdier
  • Carl Gaigné
  • Cristina Herghelegiu
Abstract
We examine whether standards raise the quality of traded products. Matching a panel of French firm–product–destination export data with a data set on sanitary and phytosanitary measures and technical barriers to trade, we find that such quality standards enforced on products by destination countries: (i) favour the export probability of high‐quality firms provided that their productivity is high enough, (ii) raise the export sales of high‐productivity, high‐quality firms at the expense of low‐productivity and low‐quality firms and (iii) increase the quality supplied by firms if their productivity is high enough. We then develop a simple new trade model under uncertainty about product quality in which heterogeneous firms can strategically invest in quality signalling to rationalize these empirical results on quality and selection effects. Les normes améliorent‐elles la qualité des produits échangés? Nous nous demandons si les normes augmentent la qualité des produits échangés. En appariant un ensemble de données sur les exportations entreprise‐produit‐destination françaises avec un ensemble de données sur les mesures sanitaires et phytosanitaires et les obstacles techniques au commerce, nous constatons que les normes de qualité appliquées aux produits par les pays de destination i) favorisent la probabilité d'exportation des entreprises de haute qualité à condition que leur productivité soit suffisamment élevée, ii) augmentent les ventes à l'exportation des entreprises de haute qualité à forte productivité au détriment des entreprises à faible productivité et de faible qualité, et iii) augmentent la qualité fournie par les entreprises si leur productivité est suffisamment élevée. Nous élaborons ensuite un nouveau modèle commercial simple en cas d'incertitude sur la qualité du produit, dans lequel des entreprises hétérogènes peuvent investir stratégiquement dans l'indication de la qualité afin de rationaliser ces résultats empiriques sur la qualité et les effets de sélection.

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  • Anne‐Célia Disdier & Carl Gaigné & Cristina Herghelegiu, 2023. "Do standards improve the quality of traded products?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(4), pages 1238-1290, November.
    • Handle: RePEc:wly:canjec:v:56:y:2023:i:4:p:1238-1290
    DOI: 10.1111/caje.12678
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    Cited by:

    1. Anne‐Célia Disdier & Carl Gaigné & Cristina Herghelegiu, 2023. "Do standards improve the quality of traded products?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(4), pages 1238-1290, November.
    2. Macedoni, Luca & Weinberger, Ariel, 2022. "Quality heterogeneity and misallocation: The welfare benefits of raising your standards," Journal of International Economics, Elsevier, vol. 134(C).
    3. Yang, Qizhong, 2024. "Heterogeneous impact of non-tariff measures on import margins through global value chains: Firm-level evidence from China," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 533-562.
    4. Duc Anh Dang & Vuong Anh Dang, 2021. "The Effects of SPSs and TBTs on Innovation: Evidence from Exporting Firms in Viet Nam," Working Papers DP-2021-16, Economic Research Institute for ASEAN and East Asia (ERIA).
    5. Nabeshima, Kaoru & Obashi, Ayako & Kim, Kunhyui, 2021. "Impacts of additional compliance requirements of regulations on the margins of trade," Japan and the World Economy, Elsevier, vol. 59(C).
    6. Djolaud, Guy, 2022. "Import Penetration of Low Quality Products : Markups Implications," MPRA Paper 114611, University Library of Munich, Germany.
    7. DOAN Thi Thanh Ha & ZHANG Hongyong, 2022. "Technical Barriers to Trade, Product Quality and Trade Margins: Firm-level evidence," Discussion papers 22056, Research Institute of Economy, Trade and Industry (RIETI).
    8. Luca Macedoni & Ariel Weinberger, 2021. "Quality Misallocation, Trade, and Regulations," CESifo Working Paper Series 9041, CESifo.
    9. Traoré, Ousmane Z & Tamini, Lota D., 2020. "The Net Effect of the Technical Non-Tariff Measures in OECD countries on African Exports of Plant Products," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304460, Agricultural and Applied Economics Association.
    10. Kan Yue, 2022. "Non‐tariff measures, product quality and import demand," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 870-900, April.
    11. Beguin, Malo, 2021. "Harmonization, Mutual Recognition or National Treatment: a Melitz approach," LIDAM Discussion Papers LFIN 2021010, Université catholique de Louvain, Louvain Finance (LFIN).
    12. Mahdi Ghodsi, 2023. "Regulatory Convergence within Technical Barriers to Trade," wiiw Working Papers 229, The Vienna Institute for International Economic Studies, wiiw.
    13. Ghodsi, Mahdi, 2023. "Exploring the ‘non-tariff measures black box’: Whose regulatory NTMs on which products improve the imported quality?," International Economics, Elsevier, vol. 173(C), pages 45-67.
    14. Payam Elhami & Mahdi Ghodsi & Robert Stehrer, 2021. "Quality of Goods Imports: Which Role for Non-tariff Measures?," wiiw Policy Notes 46, The Vienna Institute for International Economic Studies, wiiw.

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    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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