Price, Quality, and Productivity: Reconsidering the determinants of exporting behavior

Author Name MATSUURA Toshiyuki  (Keio Economic Observatory, Keio University)
Creation Date/NO. March 2015 15-J-010
Research Project Competitiveness of Japanese Firms: Causes and Effects of the Productivity Dynamics
Download / Links


Recently, many small and medium enterprises in the Japanese food manufacturing industry have expanded their business overseas through export. In this study, we explore the determinants of exporting activity at the plant-level, paying particular attention to product price and quality as well as productivity. More specifically, we use the plant-product microdata of the Census of Manufactures and estimate a Berry-type demand function to derive product quality indicators, following from Khandelwal (2010) and Smeets et al. (2014). We found product price and quality for exporters are higher than those for non-exporting plants, and product quality plays an important role as a determinant of exporting activities. Furthermore, plants with smaller market share but higher product quality as well as plants with high market share and high product quality are likely to be exporters.