Credit Constraints, Quality, and Export Prices: Theory and Evidence from China
This paper presents theory and evidence that tighter credit constrains force firms to produce lower quality. The paper develops a quality sorting model that predicts that tighter credit constraints faced by a firm reduce its optimal prices due to its choice of lower-quality products. Conversely, when quality cannot be ...
https://iems.ust.hk/publications/iems-working-papers/credit-constraints-quality-and-export-prices-theory-and-evidence-from-china