Export Quality and Income Distribution

"Given the increasing sensitivity of buyers in richer countries towards the quality of the goods that they consume, low-quality exports largely constrain the export growth of developing countries. This Element documents attempts to estimate cross-country quality variations and reviews the demand-side and supply-side explanations for the low-export-quality phenomenon. It examines how trade policies can incentivise export quality upgrading and discusses the underlying channels through which a reverse causality - export quality causing within-country income or wage inequality to worsen - may develop. This issue of wage inequality assumes relevance because export promotion policies may be difficult to sustain in such situations, particularly in large democracies where political risks from inequality driven conflict are quite high"--