Product quality and the international location of manufacturing industry

Article


Gottschalk, S. 2002. Product quality and the international location of manufacturing industry. Journal of economic integration. 17 (2), pp. 363-376. https://doi.org/10.11130/jei.2002.17.2.363
TypeArticle
TitleProduct quality and the international location of manufacturing industry
AuthorsGottschalk, S.
Abstract

This paper investigates how trade liberalisation affects manufacturing production in the South when consumer perception of product substitutability in North and South is asymmetric. Consumers in the former view foreign goods as poorer substitutes of domestic varieties, while in the latter foreign and domestic varieties are equally substitutable. The main result of our exercise is that asymmetric product substitutability gives firms in the North better access to markets in the South. Local manufacturing production then becomes unsustainable even at positive trade costs, while deepening trade liberalisation usually results in the South specialising in non-industrial production.

PublisherSejong University
JournalJournal of economic integration
ISSN1225-651X
Electronic1976-5525
Publication dates
Print15 Jun 2002
Publication process dates
Deposited15 Feb 2021
Accepted01 May 2002
Output statusPublished
Digital Object Identifier (DOI)https://doi.org/10.11130/jei.2002.17.2.363
LanguageEnglish
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