Export Prices, Product Quality and Firms' Characteristics: An Analysis on a Sample of Italian Firms

48 Pages Posted: 7 Aug 2007

Date Written: June 2007

Abstract

The unsatisfactory performance of Italian export volumes in the last decade has been attributed to three factors: the product specialization still centered around traditional sectors, the small firm size and the exceptional rise in export unit values. This paper analyzes the latter with the aim of testing three alternative hypotheses: i) measurement error; ii) composition effect: globalization forcing the exit of less productive firms producing low quality goods would have raised the average quality and thus prices of exported goods; iii) pricing strategies: Italian firms would have maximized profit margins sacrificing volumes. On the basis of sample data on price variations by destination market at the firm-level, we find that: a) in the last decade (1996-2005), export unit values have overestimated export price dynamics by 2 percentage points on average every year; b) on the basis of our new export prices, the Italian loss in world market share has been smaller, but still larger as compared to France and Germany; c) the composition effect has had a limited role.

Note: Downloadable document is in Italian.

Keywords: export unit values, product quality, firm size

JEL Classification: F1, L11, L15

Suggested Citation

Bugamelli, Matteo, Export Prices, Product Quality and Firms' Characteristics: An Analysis on a Sample of Italian Firms (June 2007). Bank of Italy Temi di Discussione (Working Paper) No. 634, Available at SSRN: https://ssrn.com/abstract=1005297 or http://dx.doi.org/10.2139/ssrn.1005297

Matteo Bugamelli (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
184
Abstract Views
1,221
Rank
296,078
PlumX Metrics