Financial imperfections, product quality, and international trade

Rosario Crino'*, Laura Ogliari

*Autore corrispondente per questo lavoro

Risultato della ricerca: Contributo in rivistaArticolo

18 Citazioni (Scopus)

Abstract

We study how financial imperfections affect product quality across countries and industries, and analyze the implications for trade flows and prices. To this purpose we assemble a unique data set, which contains estimates of export quality, financial development, and financial vulnerability, for all countries and manufacturing industries over the last three decades. We find the interplay between cross-country differences in financial frictions and cross-industry differences in financial vulnerability to be an important determinant of the geographical and sectoral variation in average product quality. We show that this effect mostly occurs along an intensive margin, whereby financial imperfections distort the quality of existing exports to a given destination market. Finally, we provide evidence that quality adjustments are an important mechanism through which financial development shapes the variation in trade flows and export prices across countries and industries.
Lingua originaleInglese
pagine (da-a)63-84
Numero di pagine22
RivistaJournal of International Economics
Volume104
Numero di pubblicazione1
DOI
Stato di pubblicazionePubblicato - 2017
Pubblicato esternamente

All Science Journal Classification (ASJC) codes

  • Finanza
  • Economia ed Econometria

Keywords

  • Economics and Econometrics
  • Finance
  • Financial frictions
  • Financial vulnerability
  • Product quality
  • Product-level data
  • Trade flows and prices

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