Reputational Comparative Advantage and Multinational Enterprise

Richard Chisik

Economic Inquiry, 2002, vol. 40, issue 4, 582-596

Abstract: For a firm without a readily identifiable brand name, quality reputation may solely reflect the country of origin. In this article I endogenize these country-of-origin reputations and show that 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 reputational comparative advantage. This specialization can also establish the location of the host and the parent firm in a multinational enterprise. Furthermore, this reputation effect can identify whether internalization or licensing is more likely to occur. Copyright 2002, Oxford University Press.

Date: 2002
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Working Paper: Reputational Comparative Advantage and Multinational Enterprise (2010)
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