Import Competition, Quality Upgrading, and Exporting: Evidence from the Peruvian Apparel Industry

• 成果类型: Article
• 署名作者: Medina, Pamela
• 署名单位: University of Toronto
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_01221
• 发表日期: 2024-09
• 页码: 1285-1300
• 关键词: labor-market adjustment; trade liberalization; IMPACT; PRODUCTIVITY; destinations; INNOVATION; prices; FIRMS

摘要

This paper studies quality upgrading to escape competition from low-wage countries and proposes a new channel that does not rely on access to new inputs or markets. Informed by Peruvian apparel firms' response to China's WTO accession, I introduce factor specificity in a multi-product-firm model. Profitability losses due to competition in low-quality segments induce firms to reallocate specific factors to produce high-quality varieties for high-income countries. Gains from this channel are large. Using an observed quality measure, I show that import competition substantially increases domestic firms' exports and high-quality export shares. Firms also reduce prices, resulting in additional welfare gains.