Social Science Today

Social Science Today

ISSN: 2368-7169 (Print)    ISSN: 2368-7177 (Online)

Volume 3 (2016), No. 1, Pages 1-18

DOI: 10.12735/sst.v3n1p01

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The Effect of Product Quality on Net Trade in the Manufacturing Sector: Contrasts between Developed and Developing Countries

Xiaonan Liu1  Hayley H. Chouinard1 

1School of Economic Sciences, Washington State University, Pullman WA, USA

URL: http://dx.doi.org/10.12735/sst.v3n1p01

To Cite this Article     Article Views: 318     Downloads: 227  Since deposited on 2016-06-28

Abstract

This paper determines and compares the effects of product quality on the value of net trade in the manufacturing sector of developed and developing countries. By incorporating the intensity of consumers’ preferences for quality, we identify quality impacts on net trade. We estimate the quality effects for 25 developed countries and 17 developing countries from 1989 to 2010. We conclude that product quality is positively related to net trade, and developed countries experience a higher quality effect. The variation of GDP per capita and average number of product varieties in the manufacturing sector could explain the different quality effects across country types.

JEL Classifications: F14

Keywords: developed and developing countries, manufacturing, net trade, product quality

To Cite this Article: Liu, X., & Chouinard, H. H. (2016). The effect of product quality on net trade in the manufacturing sector: Contrasts between developed and developing countries. Social Science Today, 3(1), 1-18. http://dx.doi.org/10.12735/sst.v3n1p01

Copyright © X. Liu & H. H. Chouinard

Creative Commons License
This article is published under license to Science and Education Centre of North America. This is an Open Access article distributed under the terms of the Creative Commons Attribution 4.0 International License.

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The Effect of Product Quality on Net Trade in the Manufacturing Sector: Contrasts between Developed and Developing Countries
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