Location Choice as a Signal for Product Quality: The Economics of 'Made in Germany'
In the literature on international marketing it is generally agreed upon that the location of production has considerable effects on consumers' beliefs about product quality. In this paper, a rational choice explanation for this fact is offered. Due to differences in country-specific costs (such a high wages and taxes) and coutnry exit costs (such as compulsory social plans), location choice can act as a signaling device for product quality in the sense that high country-specific costs signal high product quality. The 'Made-in' label may be especially relevant as a signal if sinking resources before entering the market is not posible due to capital market constraints. Furthermore, potential implications for geographic labeling laws are explored.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 153 (1997)
Issue (Month): 3 (September)
|Contact details of provider:|| Web page: http://www.mohr.de/jite|
|Order Information:|| Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany|
When requesting a correction, please mention this item's handle: RePEc:mhr:jinste:urn:sici:0932-4569(199709)153:3_510:lcaasf_2.0.tx_2-e. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Wolpert)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.