 Credence goods, consumers’ trust in regulation and high quality exportsNadia Cuffaro () and Marina Di Giacinto Bio-based and Applied Economics Journal, 2015, vol. 04, issue 2, 19 Abstract: We analyze the impact of the effectiveness of internal regulation for the development of internal and export markets for credence goods, focusing on food products, particularly for a developing country which is an exporter (or a potential exporter). In the model, since goods of actual different quality can be sold as high quality goods, expected quality is a function of consumers’ beliefs about the effectiveness of regulation. Foreign consumers, who cannot observe foreign regulation as closely as domestic ones, may partly base their expectations on the level of development of the exporting country. Low effectiveness, negative stereotype and low consumers’ trust may cause a failure in the market for high quality, and there may be a trap of underdevelopment and no high quality exports. The main policy implications are that increasing the effectiveness of regulation improves export prospects; standard setting and enforcement by external actors, such as supermarkets, or NGOs in the case of certain niche markets, is likely to be beneficial. Keywords: Agribusiness; Consumer/Household Economics; Demand and Price Analysis; International Development; International Relations/Trade; Marketing (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ags:aieabj:210029 Access Statistics for this article More articles in Bio-based and Applied Economics Journal from Italian Association of Agricultural and Applied Economics (AIEAA) Contact information at EDIRC. |
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