Country Bias Research Articles

Unraveling consumer behavior: Exploring the influence of consumer ethnocentrism, domestic country bias, brand trust, and purchasing intentions

AbstractThis narrative review examines consumer ethnocentrism, the preference for domestic products over foreign ones, as a significant factor influencing consumer behavior in both emerging and developed markets. Studies suggest that ethnocentric tendencies are more pronounced in emerging markets, driven by factors like national pride, perceived superiority, and familiarity with local products. This preference for domestic products is often linked to domestic country bias, the general inclination toward goods and brands from one's own country. However, this bias is not absolute and is moderated by product quality perceptions and the perceived capabilities of developing nations to produce high‐quality goods. In contrast, consumers in developed markets, exposed to international brands, may display a greater openness to foreign products, often driven by psychological factors like self‐expression and the symbolic value associated with these brands. Understanding these nuances of consumer ethnocentrism and domestic country bias is crucial for businesses to effectively tailor their marketing strategies and cater to diverse consumer preferences in different markets.

A Systematic Literature Review and Bibliometric Analysis of Consumer Ethnocentrism

The paper analyses the scientific research on consumer ethnocentrism using bibliometric analysis from 1958 to 2023 from the Scopus database. The research investigates the evolution of the consumer ethnocentrism studies published to date; prolific authors, journals, research articles, institutions and countries; predominant themes and their evolution; emerging areas through systematic literature review, bibliographic coupling and keyword co-occurrence technique. The results highlight that the year 2022 witnessed the maximum publications; Journal of International Marketing is at the leading position; USA has dominance in publications; the article titled “Domestic Country Bias, Country-of-Origin Effects, and Consumer Ethnocentrism: A Multidimensional Unfolding Approach” by Balabanis and Diamantopoulos has maximum citations; theoretical foundation and measurement, antecedents, moderators, possible outcomes, and emerging areas are the central themes based on keywords. The study reveals the scope of future research on tourism, education, and health sector in cross-cultural settings.

Brand transgressions: How, when, and why home country bias backfires

Despite heightened interest in brand transgressions among academics and practitioners, the literature remains silent about the influence of a brand’s origin on consumer responses to brand misconduct. This leaves managers unaware of how to adapt post-transgression recovery strategies at home and abroad. Contrary to the in-group country bias literature, we theorize an “origin-backfire” effect: consumers forgive domestic brand transgressions less. Analyzing experimental, social media, and secondary-longitudinal data, we find that consumers treat domestic brand transgressors as home-country traitors deserving punishment. Social identity threats mediate this effect and consumer ethnocentrism attenuates it. Transgressions’ damage on brand reputation and value is larger and takes longer to recover from in domestic markets. Managers can alleviate post-transgression backlash through communication framing that construes the transgression as a response to intergroup threats (in foreign markets) and through collective compensation strategies (in domestic markets). The findings reveal cross-national variability in transgressions’ experience, impact, and recovery and inform post-transgression repair strategies.

Re-estimation of the savings retention coefficient in OECD countries: a new measure of home country bias

The recent home bias is primarily related to the equity bias as measured by the international capital asset pricing model (CAPM); this measure has declined over the past two decades amid financial globalization, but remains high in most developed countries. The key to understanding this puzzling phenomenon lies in how accurately this indicator can be predicted. In this paper, we propose to use the savings retention coefficient estimated by the Feldstein–Horioka (F–H) regression as a cross-country measure of home bias. We re-estimate the savings retention coefficient based on an estimation model in which the FH regression is embedded in the model derived from Tobin's q-theory of saddle-road dynamics of investment under convex adjustment costs. We then use dynamic panel estimation to estimate the new measure in OECD countries. The main empirical results are as follows. The new measure of home country bias, such as the equity bias measure, declined steadily until 2008, but recovered to the level of the 60 s and 70 s after the 2008 financial crisis. Interestingly, people expected home country bias to be very high after the financial crisis, but in fact it simply returned to its previous level.

Do experts and laypersons differ? Some evidence from international classical music competitions

Do experts and laypersons differ in their judgments of quality? We investigate this question in the context of classical music performance, taking advantage of the fact that in many international music competitions, lay audiences as well as expert juries award prizes. Using novel data on 370 competition-editions held between 1979 and 2021, we find that jury and audience preferences match only 38% of the time. We then explore gender bias and host country bias as possible explanations for the divergence between jury and audience judgments by comparing first prizewinners and audience prizewinners with other finalists. Additionally, we use the fact that many musicians compete repeatedly to examine the predictive value of prizewinning on success in future competitions. We find that being female and being from the competition host country are negatively correlated with the likelihood of being the jury's top choice but have no relationship with the likelihood of winning an audience prize. Additionally, winning an audience prize predicts winning future competitions but being ranked first by the jury does not. Importantly, our findings extend the literature on the value of expert opinion to a new setting, using an explicitly non-expert counterfactual.

Exploring European regional trade

We use the new dataset of trade flows across 269 European regions in 24 countries constructed in Santamaría et al. (2020) to systematically explore for the first time trade patterns within and across country borders. We focus on the differences between home trade, country trade and foreign trade. We document the following facts: (i) European regional trade has a strong home and country bias, (ii) geographic distance and national borders are important determinants of regional trade, but cannot explain the strong regional home bias and (iii) the home bias is heterogeneous across regions and seems to be driven by political regional borders.

Brazil’s New Investment Treaty Model: Why Now?

The investment treaty regime, unlike other economic regimes, lacks common substantive multilateral rules and depends on countries signing bilateral or plurilateral investment treaties. As the regime presented a pro-developed country bias, developing countries, especially in Latin America, avoided signing investment treaties up to the 1980s. Brazil followed this trend and did not start an investment treaty program until the late 1990s. However, the treaties never entered into force. The country also avoided acceding to the World Bank agency responsible for investment arbitration proceedings - the International Centre for Settlement of Investment Disputes (ICSID). In 2015, Brazil started a new investment treaty program. However, the timing seems counterintuitive. The investment treaty regime had already been criticized, including inefficiency in attracting foreign investment, the potential to encroach on countries’ regulatory sovereignty and the lack of legitimacy of its investor-state dispute settlement (ISDS) procedure. Furthermore, the favorable foreign economic scenario did not force the country to seek an inflow of foreign capital at that time. The new Cooperation and Facilitation Investment Agreement (CFIA) is presented as an investment treaty model for developing countries, since it responds to major criticisms to the investment treaty regime, and at the same time meets the demands of an important domestic interest group, the Brazilian industrial sector, for a legal framework that mitigates the political risk of its increasingly internationalized operations. Brazil’s CFIA may be viewed as a model that other developing countries could emulate in the face of the failure of the traditional paradigm of investment dispute settlement.

International collaboration and high citation impact – A case analysis of immunology

Bibliometricians emphasize on international collaboration to enhance the citation impact of research publications. However, Mathew Effect for Countries brings out that the citation impact is not uniformly distributed to all country affiliations. The present study explores whether international collaboration helps in neutralizing the origin of country bias. The study explores this with productivity, author affiliation and citation data from Scopus for the immunology papers for the year 2018. The data considered pertain to India and four comparator countries which are high on international collaboration, namely Denmark, Sweden, Switzerland, and the Netherlands. The results point to playout of Mathew Effect and possible confirmation of social constructivist argument of citation practices.

Home country bias in international emissions trading: Evidence from the EU ETS

We examine the pattern of allowance trades in the European Union Emissions Trading System (EU ETS) using highly disaggregated trading data and identify a significant and robust home market bias. Our results point to informational transactions costs that increase when trading across national borders. The existing trade pattern in goods and services explains two thirds of the home bias, with the remainder due to other causes. Our finding suggests that firms make use of existing trade networks to overcome search costs in bilateral allowance trade. Since the home bias differs across firms, it follows that marginal abatement costs are not equalized across market participants of the EU ETS.

Bigotry is an Obstacle to Brotherhood and a Cause of Destruction and Hatred in Society: A Research Review

Unity is strength and cause of national power and national development depends on unity. But bigotry is the disease which is enemy of unity and brotherhood. According to Islamic teachings all Muslims are brothers and one ummah. Due to brotherhood every Muslim is sympathetic and helpful to other Muslims, while the concept of nationality, tribe, community and cast is only for mutual identification in Islam. Bigotry and illegitimate pride have harmed humanity since the beginning, even in the present time, Muslims are being irreparably harmed due to country bias, national bias, provincial bias, racial bias and linguistic bias due to which their prestige is being undermined in the world. Bigotry is a dangerous disease that is the root cause of ruin of nation and awareness of it is extremely important. This research paper on awareness of bigotry as well as prohibition of bigotry in Islam, and explains the causes and disadvantages of bigotry. It has been concluded from the research that Islam has strictly prohibited all kinds of thoughts and ideas and matters that can spread linguistic, ethnic or group conflict. Provoking bigotry, fighting on bigotry is unlawful and act of sin. It is an epidemic disease that causes other diseases and causes the destruction and destruction of the society, adopting bigotry is a cause of disgrace in this world and the hereafter.

Consumer Attitudes Towards Imported Organic Food in China and Germany: The Key Importance of Trust

Imports are necessary to satisfy consumer demand for a varied organic food assortment. In developed economies, consumers generally prefer domestic products, while consumers in developing and emerging economies tend to prefer imported. Underlying reasons for these organic food preferences are explored in an emerging and a developed economy, China and Germany, employing a comparative mixed-methods approach consisting of in-store interviews, focus groups, and an online survey. Contrary to prior research, we find a domestic country bias for organic foods in China, but smaller than in Germany, and Chinese consumers trust the organic standards of developed countries more than their own. Chinese consumers’ primary reasons for preferring organic foods are food quality and safety concerns. German consumers prefer domestic products and imports from geographically close countries and environmental concerns are the primary reasons for this and for preferring organic foods. Results suggest that higher consumer trust in institutions in developed (“WEIRD”) countries is a competitive advantage for producers in these countries, not only on the domestic market, but also in the world market for organic food.

Pride and prejudice: Unraveling and mitigating domestic country bias

Pride and prejudice: Unraveling and mitigating domestic country bias

How production networks amplify economic growth

Technological improvement is the most important cause of long-term economic growth. In standard growth models, technology is treated in the aggregate, but an economy can also be viewed as a network in which producers buy goods, convert them to new goods, and sell the production to households or other producers. We develop predictions for how this network amplifies the effects of technological improvements as they propagate along chains of production, showing that longer production chains for an industry bias it toward faster price reduction and that longer production chains for a country bias it toward faster growth. These predictions are in good agreement with data from the World Input Output Database and improve with the passage of time. The results show that production chains play a major role in shaping the long-term evolution of prices, output growth, and structural change.

Airfares with codeshares: (why) are consumers willing to pay more for products of foreign firms with a domestic partner?

This paper analyzes partnerships between foreign and domestic firms as a source of signaling advantages, considering the case of virtual codesharing in aviation. Virtual codesharing is an important type of cooperative agreement between airlines that does not change any real product attributes and hence provides the opportunity to identify this signaling effect. Roughly 75% of the flights in trans-Atlantic and Pacific markets involves codesharing. Typically, the consumer buys the ticket with the domestic airline, while a foreign airline operates the flight. Analyzing individual-level choice data from a representative sample of Australian air travelers, we find that the average consumer is willing to pay a premium between 4 and 5.5% of the ticket price when a flight by a foreign carrier is codeshared with the national carrier Qantas. When flying to a less familiar destination, risk averse consumers are willing to pay a premium about two times higher than non-risk averse consumers, suggesting that partnerships have a strong impact on consumer valuation through reducing perceived risks and uncertainties associated with alien carriers. By this mechanism, home country bias may spillover to foreign partners of domestic firms.

Islamic Banking Products: Home Country Bias and Majority Out-Group Consumption

This study provides an overview of the incentives for Muslims and non-Muslims to adopt Islamic Banking (IB) products in non-Muslim developing country. Data is collected from a sample of 1,128 Mauritians. Religion is found to have a significant influence on the intention to adopt IB products. Our results support the prediction of the theory of reasoned action as an individual is more likely to adopt IB product if he/she understands the relevant concepts and terminologies. The adoption of IB products for Muslim customers is significantly associated with bank selection criteria. Further, we provide evidence of a home country bias related to a set of financial products, as well as tactics successful in overcoming the costs of the liability of foreignness in incentivizing cultural “out-groups” to adopt IB products. Our study contributes to the literature on the motivation of individuals to adopt IB products, which is highly relevant for Islamic banks worldwide that seek to offer similar products and attract new customers. We provide implications for bank marketing managers facing the challenge of increasing adoption of new financial services and products in markets where customers may not be aware of the associated benefits due to cultural, religious, or ethnic barriers.

Global human burden and official development assistance in health R&D: The role of medical absorptive capacity

We investigate country-level determinants of Official Development Assistance (ODA) in health R&D with a focus on levels and types of human suffering as well as levels and types of medical absorptive capacity. Using latest data from a range of sources and various tests on large numbers of countries in receipt of health R&D ODA, we find support for the central assertions that human burden has a direct positive impact on receipt of health R&D ODA and that medical absorptive capacity in the recipient country moderates this relationship. The relationship between human burden and health R&D ODA receipt does not hold for countries low in medical absorptive capacity. Additional analysis reveals: (1) medical absorptive capacity that involves regular patient contact has the strongest moderating effect on the burden – funding relationship, (2) receipt of health R&D ODA under low levels of medical absorptive capacity explained not by human burden but by small country bias, and (3) the importance of nurses to health R&D ODA in countries with high levels of human suffering and health R&D ODA but voids of doctors and clinical trials.

Home country bias in academic publishing: A case study of the New England Journal of Medicine

AbstractThis study examined home country bias in the New England Journal of Medicine (NEJM). Bibliographic information of publications in the NEJM from 2000 to 2019 was collected as data. Bibliometric analyses were performed to investigate the number of papers with one or more US‐based authors in the NEJM and compare this to other journals. Citation counts of US‐based and non‐US papers were calculated and compared. The results show that US‐based papers account for 65.44% of the NEJM papers, and the US share of the NEJM papers has remained stable in the examined years whereas in other journals the percentage decreased. More importantly, US‐based papers in the NEJM display significantly lower research impact compared with non‐US papers. The results suggest that US‐based papers are favoured by the NEJM and a home country bias may exist in the publication process of the journal.

Pre-Migration Status, Social Capital, and the Educational Aspirations of Children of Immigrants in Disadvantaged Swedish Schools

ABSTRACT High aspirations can be an important factor for educational attainment, especially for youth in disadvantaged schools who are otherwise more likely to leave school early. In this article, I study the relationships between pre-migration status, social capital, and educational aspirations among youth in disadvantaged Swedish schools, using data on 960 students collected in 2014. Regression results showed that access to social capital was related to pre-migration status, and that both factors contributed to high university aspirations among children of immigrants, partly through high expectations from parents. The findings consequently show how post-migration resources and outcomes relate to pre-migration factors, challenging the destination country bias that is often present in studies on immigrants and their children.

Country size\xa0bias in global health: cross-country comparison of\xa0malaria policy and foreign aid

BackgroundForeign aid has been shown to be favourably biased towards small countries. This study investigated whether country size bias also occurs in national malaria policy and development assistance from international agencies.MethodsData from publicly available sources were collected with countries as observational units. The exploratory data analysis was based on the conceptual framework with socio-economic, environmental and institutional parameters. The strength of relationships was estimated by the Pearson and polychoric correlation coefficients. The correlation matrix was explored by factor analysis.ResultsMalaria burden is strongly correlated with GDP per capita, total health expenditure per capita, HDI; moderately with latitude, weakly with elevation, urban population share, per capita funding from the Global Fund, PMI USAID, UK government and UNICEF. Small country status is strongly correlated with population size, land area, island status; moderately with development assistance received per capita, weakly with funding per capita from Global Fund, government NMP and PMI USAID. Policy score 1, a variable derived from our factor analysis and related to malaria endemicity, is significantly strongly correlated with the malaria burden, moderately with HDI, GDP per capita, total health expenditure per capita, PMI USAID funding; weakly with island status, urban population share, latitude, coastal population share, total government expenditure and trade openness, Global Fund funding, World Bank funding, UK government funding, and UNICEF funding per capita. Policy score 2, which captures variation not related to malaria endemicity, is significantly weakly related to the ICRG index, PMI USAID funding per capita and small country status.ConclusionsThe results suggest that malaria burden and economic development are bidirectionally related. Economic development can contribute to a reduction in the malaria burden. Country size does not negatively impact malaria burden, but it does account for greater development assistance per capita from selected international agencies. National malaria policy is associated with parameters related to public governance and is modified in small countries. Small country bias is present in the distribution of socio-economic resources and the allocation of foreign aid. Small countries are characterized by distinct environmental and socio-political properties.

Buy Local: Creation of a Robust Long-Term Single-Market Equity Strategy via COVES (Country-Oriented Volatility-Enhanced Strategies)

The home country bias for investors remains ubiquitous, despite innumerable warnings of over-investment in the investor’s domestic market. While we’ve provided potential mitigations for this phenomenon in the past, this time we focused on providing a intra-market solution that would hedge against the riskier aspects of domestic over-investment. Through the use of simple signal-based switches, we were able to provide a robust strategy that plays off the anti-correlation between the market and its volatility. Initially tested in the US market via SPY and VIX, we tested our strategy with a synthetic volatility index derived from SPY pricing data. The synthetic volatility index performed similarly to VIX, with the same broad results across both variations. These market and synthetic volatility index derivative strategies were applied to ETFs of 45 countries and resulted in improvements over the base market in practically every instance. These Country-Oriented Volatility-Enhanced Strategies (COVES) provide a powerful proof-of-concept on a volatility-based hedge for a standard market index. Unfortunately, since the volatility aspect of the COVES isn’t directly investable, these strategies are not currently viable. However, a recent advancement in Decentralized Finance known as synthetic tokens could provide the vehicle to make COVES a tangible investment product. Furthermore, additional advancements in DeFi could supplement a country-focused strategy with an inflation-hedged base currency, providing an even more powerful preservation of wealth while holding a long-term investment asset such as COVES.