When Nobody Knows Your Name: Country-of-Origin as a Reputational Signal for Online Businesses
Businesses competing online frequently face crowded markets where customers have low familiarity with most firms. In such markets, does a firm's country-of-origin constitute a reputational signal that will influence customers? We examine the question in the context of consumers making online product trial decisions on the web site Download.com. We find product risk moderates the relationship between negatively stereotyped country-of-origin signals and product trial, which is taken as a measure of customers’ reputational evaluations. These findings suggest that signals arising from negative country-of-origin stereotypes can be consequential, after controlling for other reputational signals about the firm or its products. The implication for managers is that stereotyping signals can influence customers in online markets, and they should be wary of disclosing any potentially stigmatizing information.
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