Exports' quality-adjusted productivity and economic growth

According to recent studies, countries specialised in products associated with higher productivity levels are likely to grow faster than countries specialised in other goods. A limitation of these studies is that they do not control for quality differences within a product category when measuring goods' productivity level. In this paper we show that if products are distinguished by quality level there is no longer a robust relationship between specialising in products associated with higher productivity levels and faster growth. On the contrary, we find it is the specialisation in products that allow a larger room for quality improvement that leads to higher economic growth.