Export Destinations and Input Prices

This paper examines the extent to which the destination of exports matters for the input prices paid by firms, using detailed customs and firm-product-level data from Portugal. The authors use exchange rate movements as a source of variation in exp...

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Bibliographic Details
Main Authors:	Bastos, Paulo, Silva, Joana, Verhoogen, Eric
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCESS TO FOREIGN MARKETS ACCOUNTING ADVERTISING AVERAGE PRICES CHECKS CONSTANT RETURNS TO SCALE CONSUMERS CURRENCY DEVALUATION DEVELOPING COUNTRIES DEVELOPMENT POLICY DOMESTIC MARKET DOMESTIC MARKETS ECONOMETRIC MODELS ECONOMETRICS ECONOMICS ELASTICITY OF SUBSTITUTION EQUILIBRIUM EQUILIBRIUM PRICE EXCHANGE RATE EXCHANGE RATE MOVEMENTS EXPENDITURES EXPORT MARKETS EXPORT SHARE EXPORT SHARES EXPORTER EXPORTERS EXPORTS EXTERNAL TRADE FINANCIAL CRISIS FIRM PERFORMANCE FIXED COSTS FIXED INVESTMENT FIXED INVESTMENTS GDP GDP PER CAPITA GLOBAL ECONOMY GLOBALIZATION HOME COUNTRY HOME MARKET HOMOGENEOUS GOOD HOMOGENEOUS GOODS INCOME INCOME INSTRUMENT INCOME LEVEL INCOMES INDIVIDUAL FIRM INDIVIDUAL FIRMS INFLATION INFLATION RATES INPUT PRICES INSTRUMENT INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL ECONOMY INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL TRADE INTERNATIONAL TRANSACTIONS INVISIBLE HAND LABOR MARKETS LEVEL OF CONFIDENCE LOCAL CURRENCY MACROECONOMICS MARGINAL COST MARKET BEHAVIOR MARKET POWER MARKETING MIDDLE-INCOME COUNTRY OPEN ECONOMIES OPTIMIZATION OUTPUTS PARTICULAR COUNTRIES POLITICAL ECONOMY POSITIVE EFFECTS PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE LEVEL PRICE LEVELS PRICE MOVEMENTS PRICE STABILITY PRODUCT DIFFERENTIATION PRODUCT QUALITY PRODUCTION COSTS PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES PURCHASING RATES OF INFLATION REAL EXCHANGE RATE REAL EXCHANGE RATES RESERVE RESERVE BANK RETURNS SALES SCALE EFFECTS SUBSTITUTION SUPPLIER SUPPLIERS TAX TAX SYSTEM TOTAL OUTPUT TOTAL SALES TRADE LIBERALIZATION TRADING UNDERESTIMATES UNEMPLOYMENT UTILITY FUNCTION VARIABLE COST WAGES WORLD DEVELOPMENT INDICATORS WORLD ECONOMY
Online Access:	http://documents.worldbank.org/curated/en/2014/06/19643050/export-destinations-input-prices http://hdl.handle.net/10986/18766

Description
Summary:	This paper examines the extent to which the destination of exports matters for the input prices paid by firms, using detailed customs and firm-product-level data from Portugal. The authors use exchange rate movements as a source of variation in export destinations and find that exporting to richer countries leads firms to charge more for outputs and pay higher prices for inputs, other things equal. The results are supportive of the hypothesis that an exogenous increase in average destination income leads firms to raise the average quality of goods they produce and to purchase higher-quality inputs.

Export Destinations and Input Prices

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