A Gravity Model for Country of Origin Consumer Evaluations

Abstract

This paper tests the gravity model for country of origin consumer evaluations. The analysis, based on about 2500 country pairs, indicates that consumer evaluations in one country (rating country) of products made in another country (rated country) are directly related to GDP of rated country and inversely to GDP of rating country and distances between them. Country pairs with common languages, rated country being an island, and political stability in rated countries are found to have a strong positive influence on the country evaluations. Rated country being a colony of the rating country in the past, rated country being a landlocked country, and country pair being in at least one active preferential trade agreement covering goods have negative influence on the country of origin evaluations. Contiguity between country pairs is found to have no influence on the country of origin consumer evaluations.