Reputation and Learning: Japanese Car Exports to the United States
AbstractThis paper incorporates learning and reputation building into a simple dynamic stochastic model of international trade with asymmetric information. We use the model to study a bilateral trade flow influenced significantly by learning and reputation, namely U.S. imports of Japanese cars over the period 1961-2005. Numerical simulations replicate the trade flow in a robust fashion. In addition to matching this event, we explore further implications of our framework for understanding international trade patterns. Since learning and reputation building require time, predicted short run trade patterns can be quite different than those predicted in the long run. Sectorial differences in the speed of learning and reputation building affect predicted trade patterns. The extent of asymmetric information existing between importers and exporters also changes under different trade policies.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 40805.
Date of creation: Feb 2011
Date of revision:
international trade; reputation; learning; asymmetric information; automobile;
Other versions of this item:
- Dalton, John T. & Goksel, Turkmen, 2013. "Reputation and learning: Japanese car exports to the United States," Japan and the World Economy, Elsevier, vol. 25, pages 10-23.
- F10 - International Economics - - Trade - - - General
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