This paper presents theory and evidence from disaggregated Chinese data that tariff reductions induce a country's producers to upgrade the quality of their exports. The paper first documents stylized facts regarding the effect of trade liberalization on export prices. Next, an analytic framework...

China's rapid rise in the global economy following its 2001 World Trade Organization (WTO) entry has raised questions about its economic impact on the rest of the world. In this paper, we focus on the U.S. market and potential consumer benefits. We find that the China trade shock reduced the...