Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/215015 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 8013
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We investigate theoretically and empirically how exporters adjust their markups across destinations depending on bilateral distance, tariffs, and the quality of their exports. Under the assumption that trade costs are both ad valorem and per unit, our model predicts that markups rise with distance and fall with tariffs, but these effects are heterogeneous and are smaller in magnitude for higher quality exports. We find strong support for the predictions of the model using a unique data set of Argentinean firm-level wine exports combined with experts wine ratings as a measure of quality.
Subjects: 
distance
export unit values
heterogeneity
markups
quality
tariffs
trade costs
wine
JEL: 
F12
F14
F31
Document Type: 
Working Paper
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