Trade collapse, quality and food exports

This article revisits the so-called Collapse in Quality' hypothesis, according to which, during the 2008-2009 crisis, higher quality goods experienced a stronger export reduction compared to low-quality ones. Using disaggregated trade data from three European countries that traditionally export high-quality food products - France, Italy and Spain - we do not find any econometric evidence supporting this hypothesis. In contrast, we provide preliminary evidence for the concurrent hypothesis, namely that firms reduced their markup to preserve market share.