Regional reputation for quality and firms’ export performance
Read
DownLoad |
| Title | Regional reputation for quality and firms’ export performance
|
| Author | Ye Di and Zhu Linke |
| Organization | Shanghai University of Finance and Economics |
| Email | google3584521@163.com；zhu.linke@mail.shufe.edu.cn. |
| Key Words | Information Asymmetry; quality; regional quality reputation; export |
| Abstract | This paper investigate the impact of regional reputation for quality on the performance of firm exports when there is asymmetric information about product quality. We use average export quality of neighboring firms in the same region as the proxy for regional quality reputation. We find that higher regional quality reputation leads to higher exports of firms in that region. We further find that this effect is more pronounced for products whose quality is more heterogeneous. Also, we find that regional reputation has a greater impact on domestic firms, trade intermediaries, firms that export to more distant countries and firms whose product quality is lower. These evidences are consistent with the hypothesis that regional quality reputation is helpful for firms to overcome the quality information asymmetry to reach a higher level of export performance. The results of this study indicate that with the upgrading of export product quality, local governments of China need to pay more attention to the cultivation of "regional quality reputation" which is a regional public good. Similarly, the central government of China also needs to help to cultivate "national quality reputation" to improve the reputation of "Made in China", and to avoid falling into the "low-quality trap". |
| Serial Number | WP1183 |
| Time | 2017-04-25 |
|