Quality and Trade with Many Countries and Industries

This paper investigates a trade model with many countries, many goods produced
in multiple quality versions and non-homothetic preferences. It studies the impact of
productivity, population changes and trade costs on the quality composition of exports.
The analysis embeds within the same model a series of empirical results about high-income
countries specialization and trade in higher quality goods. Product di¤erentiation matters
at explaining the volumes of trade quality. High-quality goods exhibiting a high degree
of di¤erentiation are traded only by high-income countries.