Based on the study by Yaghoob Jafari, Helena Engemann, and Thomas Heckelei of Boon University, embedded in Deleverable 3.1 “ Documentation of the Modelling Structure: A Computable General Equilibrium Theory of Heterogeneous Firms with Product Quality Differentiation”, a unified business model has been developed based on existing business literature to account for differences in the quality of products offered by each company and to allow for heterogeneous consumer perceptions of product quality across countries.
The model is transformed into a calculable scenario in a CGE framework to extend its accessibility to modelers. This model shows that active firms export to a given destination if two conditions are met:

1. If the marginal cost of quality products in the domestic market is not greater than the willingness of consumers in export markets to pay for that unit of quality.
2. If the operating profit of firms on each trade link is greater than the fixed bilateral cost of trade on a link.