Asymmetric Quality Effect of Input Trade Liberalization

Ganguly, Shrimoyee; Acharyya, Rajat

doi:10.1007/978-981-16-4181-7_2

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Tariff Reduction On Imported Input1

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2023

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“…The case of an imported input being used in the production of a skill-based quality-differentiated good and the impact of a reduction in tariff on this input can similarly be analysed in the extended A-J framework. For example, as shown by Ganguly and Acharyya (2022a), lowering the tariff on the input used in Z good will improve the quality of Z only if a higher-quality variety of it requires additional imported input to a larger extent than additional skilled labour. Reducing the input tariff lowers the MC of quality for any given skilled wage but, at the same time, raises the MC of quality upgrading by raising the skilled wage, since it augments production of skill-based export goods.…”

Section: Tariff Reduction On Imported Inputmentioning

confidence: 99%

Export Quality and Income Distribution

Acharyya

Ganguly²

2023

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Given the increasing sensitivity of buyers in the richer countries towards quality of goods they consume, low-quality exports largely constrain export-growth of the developing countries. This Element documents the attempts to estimate cross-country quality variations and reviews the demand side and supply side explanations for the low-quality phenomenon. It examines how trade policies can incentivize export-quality upgrading, and discusses the underlying channels through which a reverse causality from export-quality upon within-country income or wage inequality may develop.

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Section: Tariff Reduction On Imported Inputmentioning

confidence: 99%