Testing the role of country of origin in consumer adoption of new products

Abstract

This paper presents preliminary evidence that granting banks permission to establish de novo interstate branches may have resulted in increases in the concentration of local banking markets. By allowing the widespread establishment of interstate bank branching networks via mergers, the Riegle-Neal Act of 1994 prompted a dramatic decline in the total number of banks operating in the U.S. In addition to fostering interstate branching systems via bank mergers, the Riegle-Neal Act also gave states the option to allow out-of-state banks to open de novo branches within their borders. It is not known what effect the abihty of banks to establish de novo interstate branches has had on local banking market concentration. This paper examines data from more than five hundred cities and towns for evidence of increased or decreased concentration of local banking markets as a result of states opting-in to the Riegle-Neal Act's provision allowing the establishment of de novo interstate branches. Regression results indicate that banking market concentration increased for cities in states that opted-in to de novo interstate branching. This finding may fuel the current debate of whether or not to permit banks to establish de novo branches in all states. (JEL G21) This paper empirically examines the effect of country of origin (COO) on consumer adoption of a new product. The CO0 is divided into three types--brand-of-origin, manufactureof-origin, and culture-of-origin--to capture the fact that hybrid products increasingly appear in the global market [Lim and O'Cass, 2001]. Mobile phones made in Finland, Germany, the U.S., Taiwan, Japan, and Korea are under review. The study concludes that consumers characterized as early adopters, rather than majority and laggards, tend to use manufactureof-origin as the source of information when they purchase a new product, while the majority and laggards are more likely to use brand-of-origin as the source of information. A structure model (LISREL) shows that consumers attached to empathetic value, rather than those attached to hedonic value, have a stronger propensity to take COO as important information in adopting a new product. The managerial implications for international marketers are as follows. Since the early adopters are concerned with manufacture-of-origin, it is recommended that firms make new products in developed countries in the introductory stage of the product life cycle, protruding the original manufacturing place of the product. On the contrary% in the product maturity stage, products can be outsourced to low cost original equipment manufacturer (OEM) suppliers, impressing customers with brand-of-origin. (JEL M31)

The Impact of Country of Brand Image on Symbolic Value of Luxury Brands

“…The initial research on symbolic value mainly focused on the interpersonal influence-oriented value, such as prestige value and social selfexpressive value (e.g. Vigneron & Johnson, 1999, 2004Rio, Vazquez, Iglesias, 2001); However, much research also suggests that consumers perceive personal influence-oriented value such as self-expressive value and uniqueness value (Rio et al 2001;Bauer et al, 2004); (3) Rationales. The researchers primarily discuss and explain inherent mechanisms of symbolic consumption using the theory of symbolic interactionism and ritual behavior, among which symbolic interactionism is the mainstream; (4) Antecedents.…”

“…Furthermore, Ahmed and Asrous (1996) discovered that COB effect was more significant than COM effect in a high level of product involvement context. In addition, Chen (2004) found that early adopters tend to use COM image as the cue of product evaluation, while interim adopters and laggards would prefer COB image as the evaluation criteria.…”

When Does It Pay off to Link a Brand Name to a Country?

“…Some authors (Quester, Dzever, & Chetty, 2000;Chao, 2001;Insch & McBride, 1998;2004) have considered COO to include country of design, country of parts, and country of assembly. Others (Chen, 2004;Ulgado, 2002;Thakor & Lavack, 2003) have instead chosen to distinguish the country of brand origin from the country of manufacture. Finally, Leila, and Merunka (2006) have considered the significance of the country of design and the country of manufacture.…”

“…Furthermore, the interviews have shown that, from a company's perspective, COO analysis is strongly simplified in recognizing only the country of manufacture, the country of design, and the country of brand as subconcepts influencing consumer behavior (Chen, 2004;Ulgado, 2002;Thakor & Lavack, 2003;Leila & Merunka, 2006). Further distinctions proposed by the studies, such as those pertaining to the country of parts and the country of assembly (Queter, Dzever, & Chetty, 2000;Chao, 2001;Insch & McBride, 1998;2004), have never been quoted, confirming the increasing importance of the perception of the country in terms of brand origin over the productive dimension.…”

“…Further distinctions proposed by the studies, such as those pertaining to the country of parts and the country of assembly (Queter, Dzever, & Chetty, 2000;Chao, 2001;Insch & McBride, 1998;2004), have never been quoted, confirming the increasing importance of the perception of the country in terms of brand origin over the productive dimension. The country of design, recognized by previous studies as a COO component able to influence the consumer's qualitative perception (Li, Murray, & Scott, 2000;Bradley, 2001), has been considered by the interviewed companies as an antecedent to the country of brand, which represents the influential image of the country where a brand has originated from.…”