Improving "National Brands": Reputation for Quality and Export Promotion Strategies
type: Dataset
description: 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.
issued: 2026-05-05T10:15:19.263491
language: en
modified: 2026-05-05T10:15:19.263497
contact point: Organization
  fn: CCSD
keyword: export-promoting
keyword: industrial-policy
keyword: infoeu-reposemanticspreprint
keyword: jel-f---international-economicsff1---tradeff1f12---models-of-trade-with-imperfect-competition
keyword: jel-f---international-economicsff1---tradeff1f13---trade-policy--international-trade-organiza
keyword: jel-l---industrial-organizationll1---market-structure-firm-strategy-and-market-performancell1
keyword: jel-l---industrial-organizationll5---regulation-and-industrial-policyll5l52---industrial-polic
keyword: jel-o---economic-development-innovation-technological-change-and-growthoo1---economic-developm
keyword: jel-o---economic-development-innovation-technological-change-and-growthoo2---development-plann
keyword: preprints-working-papers-
keyword: product-differentiation
keyword: product-quality
keyword: shsecohumanities-and-social-scienceseconomics-and-finance
keyword: trade
landing page: https://shs.hal.science/halshs-00797006

Improving "National Brands": Reputation for Quality and Export Promotion Strategies
type: Distribution
format: HTML
issued: 2026-05-05T10:15:19.266811
modified: 2026-05-05T10:15:19.250618
access URL: https://shs.hal.science/halshs-00797006

test_moissonnage_selune
type: Agent