
doi: 10.2139/ssrn.2617210
handle: 10419/110926 , 10419/145846
This paper studies the interaction of a minimum quality standard and exports in a vertical product differentiation model when firms sell global products. If ex ante quality of foreign firms is lower (higher) than the quality of exporting firms, a mild minimum quality standard in the home market hinders (supports) exports. The minimum quality standard increases quality in both markets. A welfare maximizing minimum quality standard is always lower under trade than under autarky. A Minimum quality standard reduces profits for the exporting firm. It increases domestic welfare, but reduces welfare in the export market.
L13, minimum quality standard,vertical differentiation,exports, ddc:330, vertical differentiation, minimum quality standard, F12, L50, exports, jel: jel:F12, jel: jel:L50, jel: jel:L13
L13, minimum quality standard,vertical differentiation,exports, ddc:330, vertical differentiation, minimum quality standard, F12, L50, exports, jel: jel:F12, jel: jel:L50, jel: jel:L13
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