Munich Personal RePEc Archive

Quality Upgrading and the Stages of Diversification

Papageorgiou, Chris and Perez-Sebastian, Fidel and Spatafora, Nikola (2016): Quality Upgrading and the Stages of Diversification.

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Abstract

This paper explores the contribution of product quality upgrading in the process of export diversification. To do this, the paper builds a multisector model following Eaton and Kortum (2002) in which product quality is incorporated as a key feature. The model is then calibrated to generate predictions about the degree of export diversification in a number of East Asian countries. It is shown that quality upgrading is a key factor to understand the changes in the degree of export diversification in the majority of countries in our sample.

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