Format du dépôt |
Fichier |
Type de dépôt |
Pré-publication, Document de travail |
Titre |
en
Improving "National Brands": Reputation for Quality and Export Promotion Strategies
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Résumé |
en
This paper studies the effect of firm and country reputation on exports when buyers cannot observe quality prior to purchase. Firm-level demand is determined by expected quality, which is driven by the dynamics of consumer learning through experience and the country of origin's reputation for quality. We show that asymmetric information can result in multiple steady-state equilibria with endogenous reputation. We identify two types of steady states: a high-quality equilibrium (HQE) and a low-quality equilibrium (LQE). In a LQE, only the lowest-quality and the highest-quality firms are active; a range of relatively high-quality firms are permanently kept out of the market by the informational friction. Countries with bad quality reputation can therefore be locked into exporting low-quality, low-cost goods. Our model delivers novel insights about the dynamic impact of trade policies. First, an export subsidy increases the steady-state average quality of exports and welfare in a LQE, but decreases both quality and welfare in a HQE. Second, there is a tax/subsidy scheme based on the duration of export experience that replicates the perfect information outcome. Third, a large reputation shock is self-fulfilling when the economy has multiple steady states. Finally, a minimum quality standard can help an economy initially in a LQE moving to a HQE, but is not necessarily welfare improving.
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Auteur(s)
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Julia Cage
1, 2, 3
, Dorothée Rouzet
3, 4
1
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
-
Université Paris 1 Panthéon-Sorbonne ( 7550 )
;
-
École normale supérieure - Paris ( 59704 )
;
-
Université Paris Sciences et Lettres ( 564132 )
;
-
École des hautes études en sciences sociales ( 99539 )
;
-
École des Ponts ParisTech ( 301545 )
;
-
Centre National de la Recherche Scientifique ( 441569 )
;
-
Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement ( 577435 )
2
PSE -
Paris-Jourdan Sciences Economiques
( 139754 )
- 48 boulevard Jourdan 75014 Paris
- France
-
École normale supérieure - Paris ( 59704 )
;
-
Université Paris Sciences et Lettres ( 564132 )
;
-
Institut National de la Recherche Agronomique USC1336 ( 92114 )
;
-
École des hautes études en sciences sociales ( 99539 )
;
-
École des Ponts ParisTech ( 301545 )
;
-
Centre National de la Recherche Scientifique UMR8545 ( 441569 )
3
Harvard University
( 38302 )
- Massachusetts Hall, Cambridge, MA 02138
- États-Unis
4
OCDE -
Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development
( 310903 )
- Organisation for Economic Co-operation and Development (OECD)
2, rue André Pascal 75775 Paris Cedex 16
- France
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Langue du document |
Anglais
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Date de production/écriture |
2014-05
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Audience |
Non spécifiée
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Mots-clés (JEL) |
-
F - International Economics/F.F1 - Trade/F.F1.F12 - Models of Trade with Imperfect Competition and Scale Economies • Fragmentation
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F - International Economics/F.F1 - Trade/F.F1.F13 - Trade Policy • International Trade Organizations
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L - Industrial Organization/L.L1 - Market Structure, Firm Strategy, and Market Performance/L.L1.L15 - Information and Product Quality • Standardization and Compatibility
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L - Industrial Organization/L.L5 - Regulation and Industrial Policy/L.L5.L52 - Industrial Policy • Sectoral Planning Methods
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O - Economic Development, Innovation, Technological Change, and Growth/O.O1 - Economic Development/O.O1.O14 - Industrialization • Manufacturing and Service Industries • Choice of Technology
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O - Economic Development, Innovation, Technological Change, and Growth/O.O2 - Development Planning and Policy/O.O2.O24 - Trade Policy • Factor Movement Policy • Foreign Exchange Policy
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Domaine(s) |
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Sciences de l'Homme et Société/Economies et finances
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Référence interne |
-
PSE Working Papers n°2013-06
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Mots-clés |
en
Product quality, Product differentiation, Export promoting, Industrial policy, trade
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