Speaker: Luhang WANG, Assistant professor, Xiamen University
Host: Shihe Fu, Associate professor, RIEM
Time: 14:30--16:00, Nov.7, Friday
Venue: H515 Yide Hall, Liulin Campus
Abstract: There is a surging trade literature on multi-product exporters who account for a disproportionally large share of total exports. On the other side, it is also well known that new exporters usually start small and many with a single product. In this paper, I bring the two bodies of literature, one on multi-product exporters and one on the post-entry dynamics, together to study how single-product exporters evolve into multi-product exporters, with special attention to the role of perceived quality in this process. I use the detailed price and quantity information on firms' exports between 2000 and 2006 from China's customs data to recover the latent quality as residuals from market- and product-specific demand functions for China's exports. A cross-sectional comparison reveals that relative to a single-product exporter, a multi-product exporter has quality premium in its core products, but quality discount in its peripheral products. But overtime within a firm-destination-product cell, the perceived quality is positively correlated with an exporter's product scope, which I argue is mainly driven by the addition of new product lines at the point when the existing products get well accepted by the market. A trade model of heterogeneous firms self-selecting into exporting markets with an once-and-for-all draw of firm- or firm- and product-specific productivity that is abstract away from the process of learning and gradual resolution of uncertainty cannot generate these patterns.
About the speaker: Dr. Luhang Wang received her Ph.D. degree in economics from
University of Toronto in 2013. She is an assistant professor at Wang Yanan Institute for Studies in Economics at Xiamen University. Her research fields are International Trade, Industrial Organization, Economic Development, and Chinese Economy.
