Export destinations and input prices

Paulo Bastos, Joana Silva, Eric Verhoogen*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

54 Citations (Scopus)


This paper examines the relationship between the destination of exports and the input prices paid by firms, using detailed customs and firm-product-level data from Portugal. Both ordinary least squares regressions and an instrumental-variable strategy using exchange-rate movements (interacted with indicators for initial exports) as a source of variation in destinations indicate that exporting to richer countries leads firms to pay higher prices for inputs, other things equal. The results are supportive of what we call the income-based quality-choice channel: selling to richer destinations leads firms to raise the average quality of goods they produce and to purchase higher-quality inputs.
Original languageEnglish
Pages (from-to)353-392
Number of pages40
JournalAmerican Economic Review
Issue number2
Publication statusPublished - Feb 2018
Externally publishedYes


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