Consumer preferences for foreign and domestic products

Abstract

Compares consumer preferences for goods made abroad and in the home country by both foreign and home‐country firms. These preferences and the intervening role of price‐quality attributes are assessed in an empirical study using conjoint analysis and a MANOVA procedure. Results suggest that country of manufacture and product quality strongly influence consumer decision making in globally available product categories. Specifically, compared to imported goods, consumers appear to prefer domestically manufactured goods and are often willing to pay a higher price for them. It is usually only when imported goods are of significantly superior quality that consumers will pay more to obtain them. Finally, in their purchase decisions, consumers appear not to put much weight on a product’s perceived importance to the home country’s manufacturing base.