Reputational Comparative Advantage and Multinational Enterprise
For a firm without a readily identifiable brand name, quality reputation may solely reflect the country of origin. In this article I endogenize these country-of-origin reputations and show that 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 reputational comparative advantage. This specialization can also establish the location of the host and the parent firm in a multinational enterprise. Furthermore, this reputation effect can identify whether internalization or licensing is more likely to occur. Copyright 2002, Oxford University Press.
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Volume (Year): 40 (2002)
Issue (Month): 4 (October)
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