Do global brands contribute to the economy of their country of origin? A dynamic spatial approach
| Pages | 768-780 |
| Date | 19 November 2018 |
| Published date | 19 November 2018 |
| DOI | https://doi.org/10.1108/JPBM-10-2017-1641 |
| Author | Wioleta Kucharska,Karol Flisikowski,Ilenia Confente |
| Subject Matter | Marketing,Product management,Brand management/equity |
Do global brands contribute to the
economy of their country of origin?
A dynamic spatial approach
Wioleta Kucharska and Karol Flisikowski
Politechnika Gda
nska, Gda
nsk, Poland, and
Ilenia Confente
University of Verona, Verona, Italy
Abstract
Purpose –Brand positioning based on the brand’s country of origin is at the centre of attention in international marketing. It is evident that global
brands constitute critical intangible assets for businesses and places. However, it is not clear how they contribute to national economies. This paper
aims to discuss the significance of brands as contributing to the value of their companies but also helping to leverage national economies. Although
global brands can be produced and purchased in multiple countries, their influence on the economy of the country where their owner ’s seat is
located can be more meaningful than in other economies included in the “global factory”.
Design/methodology/approach –Based on 500 Brandirectory, the Most Valuable Global Brands 2011-2015 rankings powered by Brand Finance,
the authors observed a spatial-economic autocorrelation which exemplifies the potential interdependency between gross domestic product (GDP)
and brand value. This relationship has become a starting point for designing a spatial regression model.
Findings –The findings support the hypothesis that assumptive spatial dependencies have a significant influence on the examined relationship of
brand value and GDP.
Originality/value –The presented study is the first to examine the potential interdependence between brand values and GDP of the countries of
origin using a dynamic spatial approach.
Keywords Intangible assets, Country of origin, Brand value, Brand origin, Global factory, Economic geography, Spatial regression
Paper type Research paper
Introduction
Brands are widely recognised as an important source of a
company’s income and competitive advantage (Barwise et al.,
1989,1990). However, several factors canaffectbrandvalue,such
as product quality (Dimitrova et al.,2017), brand awareness
(Smaoui et al., 2016) and marketing communication around the
brand (Keller and Lehmann, 2006). In addition to other frequently
explored variables that influence brand value, a key influence is the
country of origin (COO) –the place where branded products were
assembled, designed or invented and where the brand owner’s
headquarters are located (Papadopoulos, 1993).
Virtually, every study in this field has stressedthat the image
of the origin country affects what consumers think about
branded products and ultimately their success. This supports
the view that conditions of COOs, such as image, reputation
and developmentlevel, leverage conditions of their brands.
Previous research has found the existence of a positive or
negative impact of COO on brand image, reputationand value,
but with contrasting effects. For instance, Ar and Kara (2012,
2014) found a negative influence of country of production
labelled “Made in China”on brand image for consumersfrom
emerging markets. Sanyal and Datta (2011) revealed that, in
the generic drugs market in India, doctors prefer brands that
originate from a country known as rich in research and
development and found that the image of COO of branded
generics significantly, but indirectly, affects brand equity
through the mediating variables brand strength and brand
awareness. On the contrary, the findings of Smaoui et al.
(2016), based on the over-the-counterdrugs market in Tunisia,
suggested that in the context of an emerging country COO is
less important than brand status in consumers’preferences.
Jiménez and Martín (2014,2016) stressed that COO
reputation strongly influencespurchase intention, and that this
relationship is mediated by trust and varies depending on the
level of consumer ethnocentrism. The findings of
Diamantopoulos et al. (2017) about the “Made in EU”label
designation suggested that positive or negative associations
depend on the standard of comparison –that is, the specific
country againstwhich the EU is being evaluated.
Hence, it is assumed that a strong image of and positive
familiarity with a brand’s COO can positivelycontribute to the
brand’s resultsand, conversely, that negative COO associations
impair it. This meansthat COO matters in brand performance,
The current issue and full text archive of this journal is available on
Emerald Insight at: www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
27/7 (2018) 768–780
© Emerald Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/JPBM-10-2017-1641]
The authors thank Brand Finance for the data access and Guest Editors
Nicolas Papadopoulos, Mark Cleveland, Boris Bartikowski for whole their
effort and precious support.
768
To continue reading
Request your trial