Essays on the variety and quality of trade

Arnab Nayak, Purdue University

Abstract

This dissertation provides theory and evidence relating a country's factor endowments to its exported varieties, prices and quantities. I show that countries which have larger capital endowments are able produce and export a larger set of varieties within each exported category. This is because developing new products and marketing them is a capital intensive process. This dissertation highlights important implications of this effect on the ability of a country to earn higher prices and profits in the global market and also on the specialization patterns across countries. The first chapter of this dissertation demonstrates that capital abundant countries are able to make a wider variety of products and exploit consumers' love of variety to export larger quantities even when they charge higher prices for their products. This effect is above and beyond their ability to make better quality products. The second chapter of my dissertation shows that countries which are big, such as USA and China, attract a more than proportionate number of firms wanting to save on exporting costs by settling in the big markets. Notwithstanding the demand effects, countries which have more capital resources draws industries which support more varieties, whereas labor abundant countries attract those industries which supports lesser number of varieties.

Degree

Ph.D.

Advisors

Hummels, Purdue University.

Subject Area

Economics

COinS