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When and How Country Reputation Stimulates Export Volume

Author

Listed:
  • Korschun, Daniel

    (Department of Marketing)

  • Dimitrova, Boryana

    (Department of Marketing)

  • Yotov, Yoto

    (School of Economics, ERI-BAS & CESifo)

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.

Suggested Citation

  • Korschun, Daniel & Dimitrova, Boryana & Yotov, Yoto, 2015. "When and How Country Reputation Stimulates Export Volume," School of Economics Working Paper Series 2015-4, LeBow College of Business, Drexel University.
  • Handle: RePEc:ris:drxlwp:2015_004
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    Citations

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    Cited by:

    1. Tom Coupé & Oleksandr Shepotylo, 2017. "Country Reputation and Trade Policy Preferences - Using the News of the Election of Donald Trump as an Instrument," Working Papers in Economics 17/08, University of Canterbury, Department of Economics and Finance.
    2. Fiankor, D.-D. & Martinez-Zarzoso, I. & Brummer, B., 2018. "Exports and Governance: the Role of Private Voluntary Certification," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277113, International Association of Agricultural Economists.
    3. Fiankor, Dela-Dem Doe & Martinez-Zarzoso, Inmaculada & Brümmer, Bernhard, 2018. "Exports and governance: the role of private voluntary standards," GlobalFood Discussion Papers 275059, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.

    More about this item

    Keywords

    Country Reputation; International Trade; Gravity;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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