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

Lance E. Brouthers, John W. Story and John Hadjimarcou

Chapter 6 in Thought Leadership in Advancing International Business Research, 2008, pp 134-152 from Palgrave Macmillan

Abstract: 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.

Keywords: Signaling Theory; Brand Equity; International Business Study; Secondary Association; Branding Strategy (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-59423-4_7

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DOI: 10.1057/9780230594234_7

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