When and How Country Reputation Stimulates Export Volume

Daniel Korschun (), Boryana Dimitrova () and Yoto Yotov
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Daniel Korschun: Department of Marketing, Postal: LeBow College of Business, Drexel University, Philadelphia, PA
Boryana Dimitrova: Department of Marketing, Postal: LeBow College of Business, Drexel University, Philadelphia, PA

No 2015-4, School of Economics Working Paper Series from LeBow College of Business, Drexel University

Abstract: 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.

Keywords: Country Reputation; International Trade; Gravity (search for similar items in EconPapers)
JEL-codes: F13 F14 F16 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2015-10-01
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (3)

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