The impact of country-of-origin effects on industrial buyers' perceptions of product quality: An empirical examination of United States and Mexican purchasing agents

Increased globalization has created strong growth in the internationalization of consumer and industrial markets. The more international markets become, the greater the salience of country- of-origin (COO) effects on sellers' and buyers' decisions (Bilkey, 1993). Yet, despite strong evidence of COO effects on buyers' perceptions of quality, the importance of COO cues continues to be questioned. Furthermore, research to date has primarily focused on the impact of COO effects on consumer behavior. Research on the influence of COO cues on industrial buyer behavior and attitudes has been limited. Therefore, this study addresses the fundamental question: How do country-of-origin cues impact purchasing agents' perceptions of product quality?;This study extends prior research on COO effects by decomposing the country-of-origin construct into three components: country of design, country of product assembly and country of parts manufacture. Furthermore, the dependent variable, overall product quality, was also decomposed into four components: product design quality, product manufacturing quality, conformance to product design specifications quality, and other quality biases.;Survey questionnaires were sent to 1,000 randomly selected names from a 6,000 member list of the National Association of Purchasing Management for companies operating in the United States. A convenience sample of Mexican purchasing agents was also collected. The questionnaires measured the purchasing agents' perceptions of product quality for two industrial products: a corro-duty, explosion proof motor and a small power relay. The COO cues were manipulated by rotating the country of design, assembly and parts between developed and developing countries.;Results indicate that each of the three country-of-origin components affect purchasing agents' perceptions of product quality in distinctly different ways for both products in both countries. Specifically, country of design was significant for the U.S. purchasing agents' perceptions of product quality for the motor and for the Mexican purchasing agents' product quality perceptions for the relay. Country of assembly and country of parts were significant for both products and both countries. Several moderators were also tested which resulted in varied degrees of significance that differed by product, COO cue and purchasing agent nationality. Cross-national results indicate a potential bias among the U.S. purchasing agents for Asian design and manufacturing capabilities, while the Mexican purchasing agents appeared to prefer Latin American design and manufacturing capabilities.