Product and process productivity: Implications for quality choice and conditional exporter premia

• Autores: Hallak, Juan Carlos; Sivadasan, Jagadeesh
• Año de publicación: 2013
• Idioma: inglés
• Tipo de recurso: artículo
• Materia: Productivity; Quality; Product; Process
• Institución: Consejo Nacional de Investigaciones Científicas y Técnicas

We develop a model of international trade with two dimensions of firm heterogeneity. The first dimension is "process productivity", which is how we denote the standard concept of productivity as modeled in the literature. The second one is "product productivity", defined as firms´ ability to develop high-quality products spending small fixed outlays. The distinction between these two sources of productivity, together with the assumption that iceberg trade costs decrease with quality, deliver various conditional exporter premia as theoretical predictions. Conditional on size, exporters sell higher quality products, charge higher prices, pay higher input prices and higher wages, and use capital more intensively. Some of these predictions had already been documented in the empirical literature but lacked a theoretical framework for properly interpreting them. We conduct systematic tests of these predictions using manufacturing establishment data for India, the U.S., Chile, and Colombia, and find strong support for the model.
Fil: Hallak, Juan Carlos. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad de San Andrés. Departamento de Economía; Argentina
Fil: Sivadasan, Jagadeesh. University of Michigan; Estados Unidos