Abstract

BETANCOURT GOMEZ, Michel Eduardo. Oligopolistic Competition and International Trade: Examining Product Quality. Ens. Rev. econ. [online]. 2022, vol.41, n.2, pp.169-192.  Epub Mar 10, 2023. ISSN 2448-8402.  https://doi.org/10.29105/ensayos41.2-3.

This paper proposes to theoretically examine products’ quality trade with an oligopolistic competition framework a la Hotelling rather than a monopolistic competition or perfect competition framework as is standard in international trade literature. This framework makes it possible to identify the quality of products while simultaneously capturing consumers' preference for variety and quality. The theoretical results allow the construction of two indices that capture quality through prices and quantities. The indices are tested using highly disaggregated data at the product level, and results on quality trade-in selected products and countries are presented. For example, Mexico and France export quality in the case of wines; however, the indicators show that French wines have higher quality.

Keywords : D43; L13; F12; F14; Industrial Organization; International Trade; Product Quality.