Average income, income inequality and export unit values
Résumé
This paper analyses the relationship between a country's income distribution and its exports' unit values. Using bilateral export flows, we not only confirm the positive relationship between a country's average income and the quality of its exports, but further identify a heterogeneous impact of income inequality: we find a greater income spread to be beneficial for an exporter's unit values in the case of poor countries only. These results are robust to the inclusion of controls for other determinants of export unit values, as well as to the use of alternative measures of income inequality and of the quality index. We finally show that this heterogeneous impact of income inequality along the average income dimension is consistent with models emphasizing the role of the composition of local demand in determining the comparative advantage of countries in terms of quality.
Domaines
Economies et finances
Origine : Fichiers produits par l'(les) auteur(s)
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