Quality of Dutch exports in global top 5

On the list of 165 IMF-ranked countries dating from 2014, the Netherlands is in fourth position in terms of export quality, after Luxembourg, Hong Kong and Singapore. Here, quality refers to product features for which consumers are willing to pay extra. Apart from visible and measurable product features, less tangible aspects such as product marketing play a role in determining the quality of a product.

Compared with other countries, the Netherlands mainly excels in product groups such as animal and vegetable oils and fats, petroleum and related refined products, and non-ferrous metals. Dutch exporters even top the ranking in petroleum-based products. Dutch exports of machinery and transport equipment score proportionately lowest in terms of export quality. Other countries such as Germany, South Korea, Japan and the US outperform the Netherlands in this respect. Nevertheless, the quality of Dutch machinery and transport equipment is higher compared to over three-quarters of all countries with such exports.  

Over 3/4 of exports are of relatively lower quality

Based on the Dutch figures on international goods trade, a price per unit can be calculated for each product and per export transaction. When ostensibly identical products carry different export prices and the difference cannot be explained by product features, origin and business characteristics, this is indicative of a difference in quality. The larger the price difference between those seemingly equivalent products, the larger the quality gap. This means Dutch exporters obtain over three-quarters of their export turnover from relatively lower quality products. Low quality is relative and applies to mutual comparisons of Dutch domestic products. As Dutch export quality ranks in the global top 5, these products are not necessarily of low quality as seen from an international perspective.

Better products go to richer, more remote countries

In general, higher-quality products are exported to countries with a higher level of wealth, as well as more remote countries. This is due to the fact that, in relatively wealthy countries, consumers can afford to spend a larger part of their income on high-end products. In the case of more remote countries, exporters can charge a higher price per unit for high-end products to cover, for example, the higher shipping costs.

For example: the median quality of Dutch bicycle exports to the US is higher than to more nearby countries such as Norway and the UK, even though Norway and the US have similar development levels when measured in GDP per capita. Geographical remoteness may even play a larger role than the level of development. For example, a Dutch bicycle of median quality which is exported to China turns out to be of higher quality than a similar bicycle going to the UK. Income level plays a more distinct role in countries which are at similar distances from the Netherlands. For example, the median quality bicycle going to Ghana is of lesser quality than the one going to the US.