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Is there a producer quality wage premium similar to the exporter wage premium?

Hernández, Pedro J. (2012): Is there a producer quality wage premium similar to the exporter wage premium?

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Abstract

Exporter wage premium has been widely studied in the literature on international trade. The aim of this paper is analyze whether there is also a producer quality wage premium at firm level, and if so, analyze whether its origin is similar to the exporter wage premium. In other words, I test whether firms that increase their product quality become more productive and pay higher wages (as with the learning by exporting hypothesis, we can speak of learning by producing quality), or, in contrast, more-productive firms with higher wages opt to increase product quality because their higher productivity means these kinds of decisions and investments can be taken with more guarantees (self-selection hypothesis). Moreover, I find on the one hand, that firms which start to increase their product quality have a higher probability of exporting than firms that never increase their product quality, and on the other, that firms which start to export increase their product quality more than firms that never export. However, in no cases do I find evidence in favour of learning by exporting or by producing quality hypotheses.

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