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Export Industry Policy and Reputational Comparative Advantage

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  • Richard Chisik

    () (Department of Economics, Ryerson University, Toronto, Canada)

Abstract

Country-of-origin reputations are endogenized in this paper and it is shown that otherwise identical countries can be correctly perceived as differing in their percentage of high-quality producers. 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 this “reputational comparative advantage.” An inferior country-of-origin reputation leads to lower national welfare, therefore, several trade and industrial policies that can improve country-of-origin reputation are examined.

Suggested Citation

  • Richard Chisik, 2010. "Export Industry Policy and Reputational Comparative Advantage," Working Papers 017, Ryerson University, Department of Economics.
  • Handle: RePEc:rye:wpaper:wp017
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    Cited by:

    1. repec:ilo:ilowps:469183 is not listed on IDEAS
    2. Luis Araujo & Emanuel Ornelas, 2005. "Trust-Based Trade," IBMEC RJ Economics Discussion Papers 2005-08, Economics Research Group, IBMEC Business School - Rio de Janeiro.
    3. Ornelas, Emanuel, 2012. "Preferential Trade Agreements and the Labor Market," CEPR Discussion Papers 8805, C.E.P.R. Discussion Papers.
    4. Haucap, Justus & Wey, Christian & Barmbold, Jens, 2000. "Location costs, product quality and implicit franchise contracts," Journal of International Economics, Elsevier, vol. 52(1), pages 69-87, October.
    5. Brenton, Paul & Hoppe, Mombert, 2007. "Clothing and export diversification : still a route to growth for low-income countries ?," Policy Research Working Paper Series 4343, The World Bank.
    6. Nadia Cuffaro & Marina Di Giacinto, 2011. "High quality exports and consumers’ trust: a development perspective," Working Papers 2011-04, Universita' di Cassino, Dipartimento di Scienze Economiche.
    7. Jiménez, Nadia Huitzilin & San Martín, Sonia, 2010. "The role of country-of-origin, ethnocentrism and animosity in promoting consumer trust. The moderating role of familiarity," International Business Review, Elsevier, vol. 19(1), pages 34-45, February.
    8. Julia Cagé & Dorothée Rouzet, 2014. "Improving "National Brands": Reputation for Quality and Export Promotion Strategies," Working Papers halshs-00797006, HAL.
    9. Matthew Potoski & Aseem Prakash, 2009. "Information asymmetries as trade barriers: ISO 9000 increases international commerce," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(2), pages 221-238.
    10. Eric Rasmusen, 2007. "A Reputation Model of Quality in North-South Trade," Working Papers 2007-06, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    11. 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.
    12. Dinopoulos, Elias & Livanis, Grigorios T. & West, Carol Taylor, 2005. "How Cool is C.O.O.L.?," Working Papers 15658, University of Florida, International Agricultural Trade and Policy Center.
    13. Cagé, Julia & Rouzet, Dorothée, 2015. "Improving “national brands”: Reputation for quality and export promotion strategies," Journal of International Economics, Elsevier, vol. 95(2), pages 274-290.
    14. Rasmusen, Eric, 2017. "A model of trust in quality and North–South trade," Research in Economics, Elsevier, vol. 71(1), pages 159-170.
    15. Krautheim, Sebastian & Verdier, Thierry, 2016. "Offshoring with endogenous NGO activism," Journal of International Economics, Elsevier, vol. 101(C), pages 22-41.
    16. Roy Mill, 2011. "Hiring and Learning in Online Global Labor Markets," Working Papers 11-17, NET Institute, revised Oct 2011.
    17. Blanchard, Emily & Willmann, Gerald, 2011. "Escaping a protectionist rut: Policy mechanisms for trade reform in a democracy," Journal of International Economics, Elsevier, vol. 85(1), pages 72-85, September.
    18. Iraj Hashi & Nebojša Stojčić, 2013. "Knowledge Spillovers, Innovation Activities, And Competitiveness Of Industries In Eu Member And Candidate Countries," Economic Annals, Faculty of Economics, University of Belgrade, vol. 58(198), pages 7-34, July - Se.
    19. Kunal Dasgupta & Jordi Mondria, 2015. "Gains from Trade under Quality Uncertainty," Working Papers tecipa-526, University of Toronto, Department of Economics.
    20. McCalman, Phillip, 2010. "Trade policy in a "super size me" world," Journal of International Economics, Elsevier, vol. 81(2), pages 206-218, July.
    21. Cuffaro, Nadia & Di Giacinto, Marina, 2015. "Credence goods, consumers’ trust in regulation and high quality exports," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), issue 2, August.

    More about this item

    Keywords

    Country-of-Origin; Quality Reputations; Statistical Discrimination; Industrial Policy.;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • 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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