Quality Standards and Competition: Quality Coffee beans in Peru

• Main Authors: Orly Denisse Calle Roalcaba, 羅真
• Other Authors: Hsu Su-Ying
• Format: Others
• Language: en_US
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/62893725321319004485

碩士 === 南台科技大學 === 企業管理系 === 98 === First, we provide an overview of the quality coffee industry in Peru, and then analyze the impact of a minimum quality standard (MQS) on it using a vertically differentiated model. Depicting the trade between coffee producers in a developing country and consumers in a developed country, we compare the results derived in a closed economy, wherein the MQSs are determined by the government of the developing country, and in an open economy, wherein the MQSs are determined by the government of the developed country. In addition, we examine the MQSs under the citizens’ initiative in the context of the treaty of Lisbon in the European Union in order to identify their influence in the market access of coffee producers from developing countries. The results indicate that the MQSs determined by a developed country’s government attempts to maximize its social welfare and therefore, results in reducing the profit of both high- and low-quality exporting firms; consumers benefit the most from this trade. Furthermore, it is indicated that under the citizens’ initiative, the citizens attempt to establish the highest MQSs in order to increase their wealth; therefore, a rather demanding MQSs in an importing country makes it less attractive for any exporter.