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When and How Country Reputation Stimulates Export Volume

Listed author(s):
  • Korschun, Daniel

    ()

    (Department of Marketing)

  • Dimitrova, Boryana

    ()

    (Department of Marketing)

  • Yotov, Yoto

    ()

    (School of Economics, ERI-BAS & CESifo)

We examine the linkage between country reputation and export volume by matching data from a global survey in twenty countries around the world with actual export data to fifty of their trading partners. We argue that country reputation can be a novel means to reduce quality uncertainty and relational uncertainty, thereby enhancing export volume. We test the hypotheses using the well-established structural model of international trade. We find that each improvement in a world ranking of a country’s reputation for products in a target country is associated with a 2% increase in exports to that particular country (an effect equivalent to the importing country decreasing a tariff by as much as 2.9%). Furthermore, different aspects of country reputation – for its products and its people – attenuate distinct forms of uncertainty, and thereby stimulate export volume in distinct ways. We examine the linkage between country reputation and export volume by matching data from a global survey in twenty countries around the world with actual export data to fifty of their trading partners. We argue that country reputation can be a novel means to reduce quality uncertainty and relational uncertainty, thereby enhancing export volume. We test the hypotheses using the well-established structural model of international trade. We find that each improvement in a world ranking of a country’s reputation for products in a target country is associated with a 2% increase in exports to that particular country (an effect equivalent to the importing country decreasing a tariff by as much as 2.9%). Furthermore, different aspects of country reputation – for its products and its people – attenuate distinct forms of uncertainty, and thereby stimulate export volume in distinct ways.

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Paper provided by LeBow College of Business, Drexel University in its series School of Economics Working Paper Series with number 2015-4.

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Length: 38 pages
Date of creation: 01 Oct 2015
Handle: RePEc:ris:drxlwp:2015_004
Contact details of provider: Web page: http://www.lebow.drexel.edu/

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