The Quality of a Firm's Exports: Where You Export to Matters

Abstract

What drives export quality? Using firm-level data from Portugal on exports by product and destination market, we find that free-on-board unit values increase systematically with distance, and tend to be higher in shipments to richer nations. These relationships reflect not only the selection of firms across markets, but also the within-firm selection of product varieties across destinations. Furthermore, they prevail irrespective of the size of the exporter and the value of the export flow.

Keywords: Firm-level exporting, product quality, destination markets

JEL Classification: F1