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.
1. Introduction; 2. Export Quality: Measurement Issues and the Cross-country Estimates; 3. Explaining The Low (Export) Quality Phenomenon: Theory and Empirics; 4. Trade Policies, Income Redistribution and Export Quality; 5. Quality Variations, Income Redistribution and Employment; 6. Domestic Demand, Market Imperfection and Urban Unemployment; 7. Concluding Remarks.