Export Quality Dynamics
Country export quality (measured by unit values) is correlated with income level suggesting that studying quality dynamics potentially offers insights into the development process. This paper uses highly disaggregated trade data to explore the expo...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110622134741 http://hdl.handle.net/10986/3465 |
| Summary: | Country export quality (measured by unit
values) is correlated with income level suggesting that
studying quality dynamics potentially offers insights into
the development process. This paper uses highly
disaggregated trade data to explore the export quality (unit
value) dynamics of goods exported to the United States over
the 1990-2000 period. In addition to finding considerable
heterogeneity in the relative quality of exports across
countries and across goods within countries, the authors
find that the rate of quality growth varies substantially
across countries, as well. Specifically, the fastest growth
is seen in exports from the richer (OECD) countries,
implying an evolving divergence in product quality across
regions. This divergence obtains despite evidence of
conditional convergence in quality over time- goods with
lower initial relative quality levels experience faster
growth in quality. The data suggest that part of this
divergence is driven by the product mix itself -- OECD
exported products experience intrinsically higher growth
rates. This is consistent with the argument of Hausmann,
Hwang and Rodrik (2007) that what countries export does
matter for growth. However, it is partly driven by a higher
growth rate of quality in the richer countries independent
of convergence effects, suggesting that other
country-specific factors impeding overall convergence are at
work. Finally, there is very limited technological
"leap-frogging" by countries across product lines
as the relative quality of new exports, on average, is
roughly the same as incumbent exports, both in richer
countries and elsewhere. |
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