Supplier reputation and price premium: the case of groundnuts in Rotterdam

Abstract

Firm’s reputation depends on the quality of its goods and its reliability as a supplier. This may explain observed price differences between commodities from different origins but with the same observable characteristics. We analyse data for the Rotterdam market and use hedonic price analysis to show the existence of a price premium that favours the US over other origins. As secondary information points out exporter reliability as one explanation we formalise the relationship between reliability and price premiums in a theoretical model and analyse its implications.firm reputation, supplier reliability, price differences, groundnuts trade, hedonic analysis, country of origin, Demand and Price Analysis, Crop Production/Industries,