How top exporters compete? Evidence from Spain

Abstract

This paper analyzes whether top exporters follow a cost-based or a quality-based strategy. Using Spanish firm-level export data for 2016, we show that firms that set lower export prices have larger export revenues. We also find that exporters obtain larger revenues from their low-price products than from their high-price products. Some results suggest that the negative effects of a higher export price on export revenues can be attenuated if firms export goods that provide scope for quality-differentiation.