American Economic Review Vol. 108 No. 2 2018

Export Destinations and Input Prices

Paulo Bastos¹; Joana Silva²; Eric Verhoogen³

¹ The World Bank, 1818 H Street NW, Mail Stop MC3-303, Washington, DC (email: ) · ² The World Bank, 1818 H Street NW, Mail Stop I9-900, Washington, DC (email: ) · ³ Columbia University, 420 W 118th Street, Room 1022, MC 3308, New York, NY 10027 (email: )

Abstract

This paper examines the relationship between the destination of exports and the input prices paid by firms, using detailed customs and firm-product-level data from Portugal. Both ordinary least squares regressions and an instrumental-variable strategy using exchange-rate movements (interacted with indicators for initial exports) as a source of variation in destinations indicate that exporting to richer countries leads firms to pay higher prices for inputs, other things equal. The results are supportive of what we call the income-based quality-choice channel: selling to richer destinations leads firms to raise the average quality of goods they produce and to purchase higher-quality inputs.

DOI

10.1257/aer.20140647

Volume

108

Issue

2

Pages

353-392

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓