@TechReport{CEPII:2015-14,
author={Silja Baller},
title={Market Size, Trade and Quality: Evidence from French Exporters},
year=2015,
month=September,
institution={CEPII},
type={Working Papers},
url={http://www.cepii.fr/CEPII/fr/publications/wp/abstract.asp?NoDoc=8262},
number={2015-14},
abstract={This paper presents the most direct test to date of the key welfare mechanism put forward by Melitz and Ottaviano (2008): the best firms increase sales disproportionately when competing in larger markets. I test this prediction in a quality context where the best firms produce the highest quality. The empirical analysis is guided by a quality-augmentation of Melitz and Ottaviano (2008). I capture product quality empirically using a unique dataset containing firm-level quality ratings. The results are in line with the key prediction of the model. I also find a strong positive relationship between a proxy for consumer quality preference and demand for quality which is consistent with the theory.},
keywords={Heterogenous firms ; Flexible mark-ups ; Market size ; Quality ; Complementarities}
}