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Location costs, product quality and implicit franchise contracts

  • Haucap, Justus
  • Wey, Christian
  • Barmbold, Jens

In the literature on international trade, very little attention has been given to informational asymmetries between firms and consumers with respect to product quality. The few economic models that analyze the question of how asymmetric information about product quality might affect trade flows treat product quality as exogenous. In contrast, our model takes product quality as an endogenous variable, i.e. firms can choose the quality they wish to produce. In this case, location costs can signal product quality under certain conditions and thereby affect international trade flows. More specifically, intra-industry trade in vertical differentiated experience goods can be determined by information asymmetries about product quality. ZUSAMMENFASSUNG - (Standortkosten, Produktqualität und implizite Franchiseverträge) In der internationalen Handelstheorie ist der Tatsache, daß die Konsumenten in vielen Fällen nur unvollständige Information über die Produktqualität besitzen, kaum Rechnung getragen worden. Die wenigen Arbeiten, die die Wirkungen asymmetrischer Information zwischen Herstellern und Konsumenten auf den internationalen Handel untersuchen, behandeln die Produktqualität als exogene Variable. Im Gegensatz hierzu wird in diesem Beitrag Produktqualität als eine endogene Variable angesehen, die von den Unternehmen gewählt werden kann. Es wird argumentiert, daß in diesem Fall die Standortkosten zur Signalisierung der Produktqualität eines Unternehmens herangezogen werden können. Es zeigt sich, daß unter bestimmten Bedingungen die geeignete Wahl von standortspezifischen variable Kosten in Verbindung mit Standortaustrittskosten zu einem Trenngleichgewicht führen kann, in dem an einem relativ teuren Standort Hochqualitätsprodukte und an einem relativ billigen Standort Niedrigqualitätsprodukte hergestellt werden. Aus diesen Überlegungen folgt, daß intra-industrieller Handel in vertikal differenzierten Erfahrungsgütern durch Informationsasymmetrien über die Produktqualit

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

Volume (Year): 52 (2000)
Issue (Month): 1 (October)
Pages: 69-87

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Handle: RePEc:eee:inecon:v:52:y:2000:i:1:p:69-87
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505552

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