Essays on product quality, international trade and welfare
<p>This dissertation consists of four related, sole-authored chapters. It considers the microeconomic mechanisms for gains from trade in the presence of quality investments by firms. It shows within the framework of a quality-augmented heterogeneous firms model that the quality dimension matte...
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| Format: | Thesis |
| Language: | English |
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2014
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| _version_ | 1826303080040235008 |
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| author | Baller, S |
| author2 | Neary, J |
| author_facet | Neary, J Baller, S |
| author_sort | Baller, S |
| collection | OXFORD |
| description | <p>This dissertation consists of four related, sole-authored chapters. It considers the microeconomic mechanisms for gains from trade in the presence of quality investments by firms. It shows within the framework of a quality-augmented heterogeneous firms model that the quality dimension matters for welfare gains from trade. It also provides novel empirical evidence on adjustment mechanisms of aggregate quality as a consequence of globalization. To the best of my knowledge, this is the first contribution to provide a comprehensive analysis of the role of endogenous product quality in the determination of gains from trade.</p> <p>I first offer an explanation for observed industry heterogeneity in trade-induced productivity gains and show that results depend on whether or not firms have the option to invest in quality. I then take a broader view of welfare gains from trade, looking beyond productivity improvements. I find that globalization can imply a quality-variety trade-off when consumer quality preference is strong - a finding which holds under firm heterogeneity and symmetry. Nevertheless, overall gains from trade are positive. With quality being itself an important channel for gains from trade, I also investigate the detailed mechanisms by which aggregate quality changes as a consequence of globalization. This is done within the same theoretical heterogeneous firms framework as well as empirically using firm-level export data matched with firm-level quality ratings. I argue that firm heterogeneity matters for gains from trade by giving rise to an additional welfare channel in the presence of variable elasticity of demand preferences: high quality firms expand sales disproportionately in a larger market, thereby raising aggregate quality. This theoretical prediction is confirmed by the data. Furthermore, I study the mechanisms for gains from trade in a symmetric firms version of the baseline model. This allows me to isolate the role of firm heterogeneity in driving earlier results. In addition, I analyse the efficiency properties of the market equilibrium for the symmetric firms case.</p> |
| first_indexed | 2024-03-07T05:57:11Z |
| format | Thesis |
| id | oxford-uuid:eaebf607-3ccf-499c-8f60-0ce5b42a43b4 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T05:57:11Z |
| publishDate | 2014 |
| record_format | dspace |
| spelling | oxford-uuid:eaebf607-3ccf-499c-8f60-0ce5b42a43b42022-03-27T11:05:51ZEssays on product quality, international trade and welfareThesishttp://purl.org/coar/resource_type/c_db06uuid:eaebf607-3ccf-499c-8f60-0ce5b42a43b4Macro and international economicsEconometricsInnovation,productivity and growthIndustrial economicsEconomicsEnglishOxford University Research Archive - Valet2014Baller, SNeary, JJavorcik, B<p>This dissertation consists of four related, sole-authored chapters. It considers the microeconomic mechanisms for gains from trade in the presence of quality investments by firms. It shows within the framework of a quality-augmented heterogeneous firms model that the quality dimension matters for welfare gains from trade. It also provides novel empirical evidence on adjustment mechanisms of aggregate quality as a consequence of globalization. To the best of my knowledge, this is the first contribution to provide a comprehensive analysis of the role of endogenous product quality in the determination of gains from trade.</p> <p>I first offer an explanation for observed industry heterogeneity in trade-induced productivity gains and show that results depend on whether or not firms have the option to invest in quality. I then take a broader view of welfare gains from trade, looking beyond productivity improvements. I find that globalization can imply a quality-variety trade-off when consumer quality preference is strong - a finding which holds under firm heterogeneity and symmetry. Nevertheless, overall gains from trade are positive. With quality being itself an important channel for gains from trade, I also investigate the detailed mechanisms by which aggregate quality changes as a consequence of globalization. This is done within the same theoretical heterogeneous firms framework as well as empirically using firm-level export data matched with firm-level quality ratings. I argue that firm heterogeneity matters for gains from trade by giving rise to an additional welfare channel in the presence of variable elasticity of demand preferences: high quality firms expand sales disproportionately in a larger market, thereby raising aggregate quality. This theoretical prediction is confirmed by the data. Furthermore, I study the mechanisms for gains from trade in a symmetric firms version of the baseline model. This allows me to isolate the role of firm heterogeneity in driving earlier results. In addition, I analyse the efficiency properties of the market equilibrium for the symmetric firms case.</p> |
| spellingShingle | Macro and international economics Econometrics Innovation,productivity and growth Industrial economics Economics Baller, S Essays on product quality, international trade and welfare |
| title | Essays on product quality, international trade and welfare |
| title_full | Essays on product quality, international trade and welfare |
| title_fullStr | Essays on product quality, international trade and welfare |
| title_full_unstemmed | Essays on product quality, international trade and welfare |
| title_short | Essays on product quality, international trade and welfare |
| title_sort | essays on product quality international trade and welfare |
| topic | Macro and international economics Econometrics Innovation,productivity and growth Industrial economics Economics |
| work_keys_str_mv | AT ballers essaysonproductqualityinternationaltradeandwelfare |