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Export industry policy and reputational comparative advantage

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  • Chisik, Richard

Abstract

Country-of-origin reputations are endogenized in this paper and it is shown that otherwise identical countries can be correctly perceived as differing in their percentage of high-quality producers. These self-fulfilling reputations determine not only the average quality of a country’s exports but also the type of products in which a country specializes. Hence, the pattern of international trade can be determined by this “reputational comparative advantage.” An inferior country-of-origin reputation leads to lower national welfare, therefore, several trade and industrial policies that can improve country-of-origin reputation are examined.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 59 (2003)
Issue (Month): 2 (March)
Pages: 423-451

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Handle: RePEc:eee:inecon:v:59:y:2003:i:2:p:423-451

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Web page: http://www.elsevier.com/locate/inca/505552

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  1. Bengt Holmstrom & Roger B. Myerson, 1981. "Efficient and Durable Decision Rules with Incomplete Information," Discussion Papers 495, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  2. Nancy A. Lutz, 1989. "Warranties as Signals under Consumer Moral Hazard," RAND Journal of Economics, The RAND Corporation, vol. 20(2), pages 239-255, Summer.
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  6. Bagwell, Kyle, 1991. "Optimal Export Policy for a New-Product Monopoly," American Economic Review, American Economic Association, vol. 81(5), pages 1156-69, December.
  7. Justus Haucap & Christian Wey & Jens F. Barmbold, 1997. "Location Choice as a Signal for Product Quality: The Economics of 'Made in Germany'," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 153(3), pages 510-, September.
  8. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
  9. Kyle Bagwell, 1992. "Commitment and Observability in Games," Discussion Papers 1014, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  10. Chiang, Shih-Chen & Masson, Robert T, 1988. "Domestic Industrial Structure and Export Quality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 29(2), pages 261-70, May.
  11. Grossman, Gene M & Horn, Henrik, 1988. "Infant-Industry Protection Reconsidered: The Case of Informational Barriers to Entry," The Quarterly Journal of Economics, MIT Press, vol. 103(4), pages 767-87, November.
  12. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-40, December.
  13. C Min Han & Vern Terpstra, 1988. "Country-Of-Origin Effects for Uni-National and Bi-National Products," Journal of International Business Studies, Palgrave Macmillan, vol. 19(2), pages 235-255, June.
  14. Wolfgang Mayer, 1984. "The Infant-Export Industry Argument," Canadian Journal of Economics, Canadian Economics Association, vol. 17(2), pages 249-69, May.
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Citations

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Cited by:
  1. Luis Araujo & Emanuel Ornelas, 2007. "Trust-based trade," LSE Research Online Documents on Economics 19693, London School of Economics and Political Science, LSE Library.
  2. Eric Rasmusen, 2007. "A Reputation Model of Quality in North-South Trade," Working Papers 2007-06, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  3. Ornelas, Emanuel, 2012. "Preferential Trade Agreements and the Labor Market," CEPR Discussion Papers 8805, C.E.P.R. Discussion Papers.
  4. Jiménez, Nadia Huitzilin & San Martín, Sonia, 2010. "The role of country-of-origin, ethnocentrism and animosity in promoting consumer trust. The moderating role of familiarity," International Business Review, Elsevier, vol. 19(1), pages 34-45, February.
  5. Justus Haucap & Christian Wey & Jens Barmbold, 1998. "Location Costs, Product Quality, and Implicit Franchise Contracts," CIG Working Papers FS IV 98-08, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  6. Stephen DeLoach & Jayoti Das, 2008. "Resolving the paradox of social standards and export competitiveness," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 17(4), pages 467-483.
  7. Matthew Potoski & Aseem Prakash, 2009. "Information asymmetries as trade barriers: ISO 9000 increases international commerce," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(2), pages 221-238.
  8. repec:hal:wpaper:halshs-00797006 is not listed on IDEAS
  9. Dinopoulos, Elias & Livanis, Grigorios T. & West, Carol Taylor, 2005. "How Cool is C.O.O.L.?," Working Papers 15658, University of Florida, International Agricultural Trade and Policy Center.
  10. Roy Mill, 2011. "Hiring and Learning in Online Global Labor Markets," Working Papers 11-17, NET Institute, revised Oct 2011.
  11. Iraj Hashi & Nebojša Stojčić, 2013. "Knowledge Spillovers, Innovation Activities, And Competitiveness Of Industries In Eu Member And Candidate Countries," Economic Annals, Faculty of Economics, University of Belgrade, vol. 58(198), pages 7-34, July - Se.
  12. Nadia Cuffaro & Marina Di Giacinto, 2011. "High quality exports and consumers’ trust: a development perspective," Working Papers 2011-04, Universita' di Cassino, Dipartimento di Scienze Economiche.
  13. Blanchard, Emily & Willmann, Gerald, 2011. "Escaping a protectionist rut: Policy mechanisms for trade reform in a democracy," Journal of International Economics, Elsevier, vol. 85(1), pages 72-85, September.
  14. Brenton, Paul & Hoppe, Mombert, 2007. "Clothing and export diversification : still a route to growth for low-income countries ?," Policy Research Working Paper Series 4343, The World Bank.
  15. McCalman, Phillip, 2010. "Trade policy in a "super size me" world," Journal of International Economics, Elsevier, vol. 81(2), pages 206-218, July.
  16. Julia Cagé & Dorothée Rouzet, 2014. "Improving "National Brands": Reputation for Quality and Export Promotion Strategies," PSE Working Papers halshs-00797006, HAL.

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