For multinationals, replicating the home country’s practices abroad depends entirely on location-specific factors — supplier network, infrastructure and the local ‘culture’. But does product location affect its quality? Nicola Lacetera and Justin R Sydnor compare Japanese-built cars to those built in the US, of the same company (Toyota and Honda) to see whether the long-run value and quality of otherwise identical cars depends on the country of assembly by using data set of over 565,000 used-cars transactions. Their findings suggest that Japanese-assembled versions sell for slightly more than their US-built counterparts. But for the more recent models (those built after 2002), Japan-built cars were no more valuable than those built in the US.
Title: Would You Buy a Honda Made in the US? The Impact of Production Location on Manufacturing Quality; Source: NBER
Online reviews are supposed to help consumers make a decision, but fake and biased reviews posted either by a company or an indifferent reviewer makes the process redundant. A study by Dina Mayzlin, Yaniv Dover and Judith A Chevalier analyses the extent of fakery by comparing hotel reviews on travel websites: Expedia and Tripadvisor. Their results suggest that mostly, fake reviews are higher in case of independent hotels and lowest among branded chains. Also, since anyone can post comments on Tripadvisor, hotels with a high incentive to fake have a greater share of positive reviews.
Title: Promotional Reviews: An Empirical Investigation of Online Review Manipulation; Source: NBER
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