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A Signaling Theory Investigation of How to Overcome Negative Country-of-Origin Effects

In: Thought Leadership in Advancing International Business Research

Author

Listed:
  • Lance E. Brouthers
  • John W. Story
  • John Hadjimarcou

Abstract

Signaling theory, which finds its roots in information economics and relies on the idea of information asymmetry (Spence, 1973), may provide some guidance with respect to possible ways firms may ameliorate the effects of negative country stereotypes. The concept of information asymmetry simply suggests that one party in an exchange (e.g., manufacturers) possesses information about the product that the other party (e.g., consumers) does not have (Rao et al., 1999; Kirmani and Rao, 2000). In the case of products associated with Developing Countries (DCs), the consumer and marketer may possess not only asymmetrical information, but information that is strongly contradictory.

Suggested Citation

  • Lance E. Brouthers & John W. Story & John Hadjimarcou, 2008. "A Signaling Theory Investigation of How to Overcome Negative Country-of-Origin Effects," Palgrave Macmillan Books, in: Arie Y. Lewin & S. Tamer Cavusgil & G. Tomas M. Hult & David A. Griffith (ed.), Thought Leadership in Advancing International Business Research, chapter 6, pages 134-152, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-59423-4_7
    DOI: 10.1057/9780230594234_7
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    Cited by:

    1. Saptarshi Bhattacharya & Rajendra Prasad Sharma, 2022. "The Impact of Country of Origin, Trust, and Satisfaction on Online Purchase Intention in Emerging Markets: An Indian Perspective," Jindal Journal of Business Research, , vol. 11(1), pages 70-80, June.

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