Prices, Plant Size, and Product Quality

@article{Kugler2012PricesPS,
  title={Prices, Plant Size, and Product Quality},
  author={M. Kugler and E. Verhoogen},
  journal={The Review of Economic Studies},
  year={2012},
  volume={79},
  pages={307-339}
}
Drawing on uncommonly rich and representative data from the Colombian manufacturing census, this paper documents new empirical relationships between input prices, output prices, and plant size and proposes a model of endogenous input and output quality choices by heterogeneous firms to explain the observed patterns. The key empirical facts are that, on average within narrowly defined sectors, (1) larger plants charge more for their outputs and (2) larger plants pay more for their material… Expand
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