Effect of Product Quality on Market Share of Intermediate Goods
KANG Zhen-yu1, QIU Li-cheng2, WANG Zi-feng3
1. School of Economics and Politics, Guizhou Normal College, Guiyang 550018, China; 2. School of Economics, Tianjin University of Commerce, Tianjin 300134, China; 3. School of Economics, Nankai University, Tianjin 300071, China
Abstract：
The paper theoretically proves that producers whose product has higher quality crowd out those whose product has lower quality. With the custom trade data during 2000-2006, this paper uses product unit price as a proxy for product quality in order to examine the effect of the product quality on the market share of intermediate goods’ producers who have market power. The empirical study shows producers that take the maximum share among exporting firms have a positive effect of product quality on their market shares. Further, it implies that those producers take quality competition strategy in post hoc reasoning method.
2017 
