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Minimum effective scale in export promotion

Author

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  • Timothy J. Richards

    (Arizona State University East, Morrison School of Agribusiness and Resource Management, Mail Code 0180, 7001 East Williams Field Road, Bldg. 20, Mesa, AZ 85212. E-mail: trichards@asu.edu)

  • Paul M. Patterson

    (Arizona State University East, Morrison School of Agribusiness and Resource Management, Mail Code 0180, 7001 East Williams Field Road, Bldg. 20, Mesa, AZ 85212. E-mail: trichards@asu.edu)

Abstract

Nonprice promotion has long been used by small firms or organizations to increase agricultural exports. Some believe that export promotion in these cases is often unsuccessful as the promoter is unable to achieve the “critical mass” of awareness that is required for success. The objective of this article is to develop a theoretical explanation for the likely existence of minimum expenditure thresholds and to estimate their size using an econometric model of the optimal supply of advertising. An empirical example of apple promotion from Washington state (USA) finds minimum effective scale levels for four key promotion activities among several Latin American countries.[EconLit citations: C34, M37, Q17]. © 2002 Wiley Periodicals, Inc.

Suggested Citation

  • Timothy J. Richards & Paul M. Patterson, 2002. "Minimum effective scale in export promotion," Agribusiness, John Wiley & Sons, Ltd., vol. 18(4), pages 523-541.
    • Handle: RePEc:wly:agribz:v:18:y:2002:i:4:p:523-541
    DOI: 10.1002/agr.10036
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    References listed on IDEAS

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    Cited by:

    1. Henry Kinnucan & Øystein Myrland, 2008. "On generic vs. brand promotion of farm products in foreign markets," Applied Economics, Taylor & Francis Journals, vol. 40(6), pages 673-684.
    2. Lee, In Hyeock & Rugman, Alan M., 2012. "Firm-specific advantages, inward FDI origins, and performance of multinational enterprises," Journal of International Management, Elsevier, vol. 18(2), pages 132-146.

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