Export Destinations and Input Prices

This paper examines the extent to which the destination of exports matters for the input prices paid by firms, using detailed customs and firm-product-level data from Portugal. The authors use exchange rate movements as a source of variation in export destinations and find that exporting to richer countries leads firms to charge more for outputs and pay higher prices for inputs, other things equal. The results are supportive of the hypothesis that an exogenous increase in average destination income leads firms to raise the average quality of goods they produce and to purchase higher-quality inputs.

Bibliographic Details

Main Authors:	Bastos, Paulo, Silva, Joana, Verhoogen, Eric
Language:	English en_US
Published:	World Bank, Washington, DC 2014-06
Subjects:	ACCESS TO FOREIGN MARKETS, ACCOUNTING, ADVERTISING, AVERAGE PRICES, CHECKS, CONSTANT RETURNS TO SCALE, CONSUMERS, CURRENCY, DEVALUATION, DEVELOPING COUNTRIES, DEVELOPMENT POLICY, DOMESTIC MARKET, DOMESTIC MARKETS, ECONOMETRIC MODELS, ECONOMETRICS, ECONOMICS, ELASTICITY OF SUBSTITUTION, EQUILIBRIUM, EQUILIBRIUM PRICE, EXCHANGE RATE, EXCHANGE RATE MOVEMENTS, EXPENDITURES, EXPORT MARKETS, EXPORT SHARE, EXPORT SHARES, EXPORTER, EXPORTERS, EXPORTS, EXTERNAL TRADE, FINANCIAL CRISIS, FIRM PERFORMANCE, FIXED COSTS, FIXED INVESTMENT, FIXED INVESTMENTS, GDP, GDP PER CAPITA, GLOBAL ECONOMY, GLOBALIZATION, HOME COUNTRY, HOME MARKET, HOMOGENEOUS GOOD, HOMOGENEOUS GOODS, INCOME, INCOME INSTRUMENT, INCOME LEVEL, INCOMES, INDIVIDUAL FIRM, INDIVIDUAL FIRMS, INFLATION, INFLATION RATES, INPUT PRICES, INSTRUMENT, INTERNATIONAL BANK, INTERNATIONAL ECONOMICS, INTERNATIONAL ECONOMY, INTERNATIONAL FINANCIAL STATISTICS, INTERNATIONAL TRADE, INTERNATIONAL TRANSACTIONS, INVISIBLE HAND, LABOR MARKETS, LEVEL OF CONFIDENCE, LOCAL CURRENCY, MACROECONOMICS, MARGINAL COST, MARKET BEHAVIOR, MARKET POWER, MARKETING, MIDDLE-INCOME COUNTRY, OPEN ECONOMIES, OPTIMIZATION, OUTPUTS, PARTICULAR COUNTRIES, POLITICAL ECONOMY, POSITIVE EFFECTS, PRICE ELASTICITY, PRICE ELASTICITY OF DEMAND, PRICE INCREASE, PRICE INCREASES, PRICE INDEX, PRICE LEVEL, PRICE LEVELS, PRICE MOVEMENTS, PRICE STABILITY, PRODUCT DIFFERENTIATION, PRODUCT QUALITY, PRODUCTION COSTS, PRODUCTION FUNCTION, PRODUCTIVITY, PRODUCTIVITY GROWTH, PRODUCTIVITY INCREASES, PURCHASING, RATES OF INFLATION, REAL EXCHANGE RATE, REAL EXCHANGE RATES, RESERVE, RESERVE BANK, RETURNS, SALES, SCALE EFFECTS, SUBSTITUTION, SUPPLIER, SUPPLIERS, TAX, TAX SYSTEM, TOTAL OUTPUT, TOTAL SALES, TRADE LIBERALIZATION, TRADING, UNDERESTIMATES, UNEMPLOYMENT, UTILITY FUNCTION, VARIABLE COST, WAGES, WORLD DEVELOPMENT INDICATORS, WORLD ECONOMY,
Online Access:	http://documents.worldbank.org/curated/en/2014/06/19643050/export-destinations-input-prices https://hdl.handle.net/10986/18766
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