Renting Goodwill in International Marketing Channels: An Analysis of Pricing Strategies and Bargaining Power

This paper investigates the pricing decisions of foreign manufacturers in international markets within a bargaining framework with asymmetric information and the rental of goodwill. The key findings are: first, the foreign manufacturer follows a mark-up pricing strategy in which its gross margin and the quality premium over the domestic product are shared with the importer. Second, a manufacturer–importer contract occurs only when the manufacturer’s bargaining power is within an admissible range which shrinks as transaction costs increase. Third, the domestic consumer will only purchase the foreign product if the importer’s goodwill in the domestic market is sufficiently large to signal quality. The paper contributes to the literature on exchange relationships between foreign manufacturers and importers. Copyright International Atlantic Economic Society 2005C70, D40, FO,

Setting the Theoretical Foundations of Importing Research: Past Evaluation and Future Perspectives

Although prior efforts have been made to review research on importing, an updated, integrated, and chronological assessment of its theoretical evolution is lacking. This study critically investigates the theoretical foundations of importing research using a comprehensive review of 321 importing-related articles published during the 1960–2010 period. The analysis reveals that, although in general this research adopts a certain theoretical perspective, a notable part of it is not theoretically anchored. Of those studies that rely on theories, the most commonly used are the neoclassical microeconomic model, the behavioral model, and transaction cost economics. These theories were mainly associated with international buying behavior, importer–exporter relationships, and strategic aspects of importing. The study also identifies a range of other important topics that could be investigated using extant theories. In addition, the authors propose several other theories not previously employed, such as the institutional, stakeholder, and resource dependence theories, to be used in the study of new research issues. Finally, the authors suggest several actions toward theory advancement, including the need to integrate multiple theoretical paradigms, adjust theory to different environments, combine quantitative and qualitative inputs, cross-fertilize ideas from various disciplines, and periodically assess developments in the importing literature