Chen, Natalie and Juvenal, Luciana (2015) Quality and the great trade collapse. Working Paper. Coventry: University of Warwick. Department of Economics. Warwick economics research papers series (WERPS) (1078). (Unpublished)

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Abstract

We explore whether the global financial crisis has had heterogeneous effects on traded goods differentiated by quality. Combining a dataset of Argentinean firm-level destination-specific wine exports with quality ratings, we show that higher quality exports grew faster before the crisis, but this trend reversed during the recession. Quantitatively, the effect is large: up to nine percentage points difference in trade performance can be explained by the quality composition of exports. This flight from quality was triggered by a fall in aggregate demand, was more acute when households could substitute imports by domestic alternatives, and was stronger for smaller firms’ exports.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Global Financial Crisis, 2008-2009, Exports
Series Name:	Warwick economics research papers series (WERPS)
Publisher:	University of Warwick. Department of Economics
Place of Publication:	Coventry
ISSN:	0083-7350
Official Date:	November 2015
Dates:	Date Event November 2015 Published
Number:	1078
Number of Pages:	42
Institution:	University of Warwick
Status:	Not Peer Reviewed
Publication Status:	Unpublished
Date of first compliant deposit:	27 January 2016
Date of first compliant Open Access:	8 February 2016
Funder:	Federal reserve bank of St. Louis, International Monetary Fund

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