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Export destinations and input prices
 
Author:Bastos, Paulo; Silva, Joana; Verhoogen, Eric; Collection Title:Policy Research working paper ; no. WPS 6914
Country:World; Date Stored:2014/06/09
Document Date:2014/06/01Document Type:Policy Research Working Paper
SubTopics:Markets and Market Access; Economic Theory & Research; Emerging Markets; Debt Markets; Access to MarketsLanguage:English
Region:The World RegionReport Number:WPS6914
Volume No:1 of 1  

Summary: This paper examines the extent to which the destination of exports matters for the input prices paid by firms, using detailed customs and firm-product-level data from Portugal. The authors use exchange rate movements as a source of variation in export destinations and find that exporting to richer countries leads firms to charge more for outputs and pay higher prices for inputs, other things equal. The results are supportive of the hypothesis that an exogenous increase in average destination income leads firms to raise the average quality of goods they produce and to purchase higher-quality inputs.

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