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Reputational Comparative Advantage and Multinational Enterprise

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  • Richard Chisik

Abstract

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.

Suggested Citation

  • Richard Chisik, 2002. "Reputational Comparative Advantage and Multinational Enterprise," Economic Inquiry, Western Economic Association International, vol. 40(4), pages 582-596, October.
    • Handle: RePEc:oup:ecinqu:v:40:y:2002:i:4:p:582-596
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    Cited by:

    1. Amankwah-Amoah, Joseph & Khan, Zaheer & Osabutey, Ellis L.C., 2021. "COVID-19 and business renewal: Lessons and insights from the global airline industry," International Business Review, Elsevier, vol. 30(3).
    2. 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.
    3. Zhong, Jiatong, 2022. "Reputation of Quality in International Trade: Evidence from Consumer Product Recalls," Working Papers 2022-8, University of Alberta, Department of Economics.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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