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The Value of Reputation in Trade: Evidence from Alibaba

Maggie Chen () and Min Wu
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Min Wu: George Washington University

Working Papers from The George Washington University, Institute for International Economic Policy

Abstract: We examine the role of an online reputation mechanism in international trade by exploring T-shirt exports on Alibaba. Exploiting rich transaction data and features of search and rating algorithms, we show that exporters displaying a superior reputation perform significantly better than peers with nearly identical true ratings and observables and the value of reputation rises with the level of information friction and the specificity of information. We develop a dynamic reputation model with heterogeneous cross-country information friction to quantify the effect of the reputation mechanism and find a 20-percent increase in aggregate exports fueled by a market reallocation towards superstars

Keywords: reputation; information; superstar; Alibaba (search for similar items in EconPapers)
JEL-codes: F1 D8 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2020-04
New Economics Papers: this item is included in nep-int
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Working Paper: The Value of Reputation in Trade: Evidence from Alibaba (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:gwi:wpaper:2020-4

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