Does trade weaken product standards?

Katia Berti, Rod Falvey

Research output: Contribution to journalArticleResearchpeer-review

Abstract

We investigate the effects of trade on national minimum quality standards for a product whose quality is unobservable to consumers prior to purchase. Two standard-setting regimes are considered: (1) where the regulatory authority takes the trade share as given; and (2) where the regulatory authority takes full account of its ability to influence the trade share. We find that standards are not a protectionist instrument in this model, the usual gains from trade apply if standards are maintained at their autarky values, trade can cause private standards to be adjusted in a welfare reducing way, and the welfare of a country is higher if its regulatory authority adopts regime (2) rather than (1).

Original languageEnglish
Pages (from-to)852-868
Number of pages17
JournalReview of International Economics
Volume26
Issue number4
DOIs
Publication statusPublished - 1 Sep 2018

Fingerprint

regulatory authority
welfare
regime
purchase
product standard
cause
ability
Values

Cite this

Berti, Katia ; Falvey, Rod. / Does trade weaken product standards?. In: Review of International Economics. 2018 ; Vol. 26, No. 4. pp. 852-868.
@article{0c4467ca8f7745e1b41dbeabc9d0a12d,
title = "Does trade weaken product standards?",
abstract = "We investigate the effects of trade on national minimum quality standards for a product whose quality is unobservable to consumers prior to purchase. Two standard-setting regimes are considered: (1) where the regulatory authority takes the trade share as given; and (2) where the regulatory authority takes full account of its ability to influence the trade share. We find that standards are not a protectionist instrument in this model, the usual gains from trade apply if standards are maintained at their autarky values, trade can cause private standards to be adjusted in a welfare reducing way, and the welfare of a country is higher if its regulatory authority adopts regime (2) rather than (1).",
author = "Katia Berti and Rod Falvey",
year = "2018",
month = "9",
day = "1",
doi = "10.1111/roie.12345",
language = "English",
volume = "26",
pages = "852--868",
journal = "Review of International Economics",
issn = "0965-7576",
publisher = "Wiley-Blackwell",
number = "4",

}

Does trade weaken product standards? / Berti, Katia; Falvey, Rod.

In: Review of International Economics, Vol. 26, No. 4, 01.09.2018, p. 852-868.

Research output: Contribution to journalArticleResearchpeer-review

TY - JOUR

T1 - Does trade weaken product standards?

AU - Berti, Katia

AU - Falvey, Rod

PY - 2018/9/1

Y1 - 2018/9/1

N2 - We investigate the effects of trade on national minimum quality standards for a product whose quality is unobservable to consumers prior to purchase. Two standard-setting regimes are considered: (1) where the regulatory authority takes the trade share as given; and (2) where the regulatory authority takes full account of its ability to influence the trade share. We find that standards are not a protectionist instrument in this model, the usual gains from trade apply if standards are maintained at their autarky values, trade can cause private standards to be adjusted in a welfare reducing way, and the welfare of a country is higher if its regulatory authority adopts regime (2) rather than (1).

AB - We investigate the effects of trade on national minimum quality standards for a product whose quality is unobservable to consumers prior to purchase. Two standard-setting regimes are considered: (1) where the regulatory authority takes the trade share as given; and (2) where the regulatory authority takes full account of its ability to influence the trade share. We find that standards are not a protectionist instrument in this model, the usual gains from trade apply if standards are maintained at their autarky values, trade can cause private standards to be adjusted in a welfare reducing way, and the welfare of a country is higher if its regulatory authority adopts regime (2) rather than (1).

UR - http://www.scopus.com/inward/record.url?scp=85051736771&partnerID=8YFLogxK

U2 - 10.1111/roie.12345

DO - 10.1111/roie.12345

M3 - Article

VL - 26

SP - 852

EP - 868

JO - Review of International Economics

JF - Review of International Economics

SN - 0965-7576

IS - 4

ER -