Journal
JOURNAL OF INTERNATIONAL ECONOMICS
Volume 102, Issue -, Pages 282-290Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.jinteco.2016.07.005
Keywords
Export prices; Quality upgrading; Innovation; Market segmentation
Categories
Funding
- Brazilian Statistical Office (IBGE-Brazil)
- German Research Foundation [SFB/FR15]
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This paper uses producer quality information to investigate whether firms segment markets and adapt product quality and prices according to destination country characteristics. Using detailed price and quality data for Brazilian exporters over time, the results document quality-based market segmentation, by which firms raise quality and prices to high-income destinations. A major exchange rate shock and further robustness analysis reinforce the hypothesis that adjustments in quality and prices happen within the firm and that differences in prices across destinations may be driven by investments in product quality and demand for high quality. (C) 2016 Elsevier B.V. All rights reserved.
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