Research on country-of-origin (COO) effects, or the impact that stereotyped perceptions about nations have on product evaluations and purchase intentions (Nebenzahl, Jaffe, and Lampert 1997), has been heralded as one of the most widely researched topics in international marketing. Whereas the vast majority of studies focused on the general image of a country that triggers the COO effect (Roth and Diamantopoulos 2009; Usunier and Cestre 2007), in light of recent criticisms (e.g., Samiee 2010; 2011; Usunier 2006; 2011), latest literature takes on a narrower perspective by arguing that a company can primarily benefit from the COO effect if consumers believe that the country is a prototypical origin of products in that category (e.g., Switzerland for watches, France for fashion, Germany for engineering). This concept is also referred to as product ethnicity, or the extent of product-country matches (Roth and Romeo 1992; Tseng and Balabanis 2011; Usunier and Cestre 2007). Apart from country characteristics, recent research suggests to consider consumer characteristics at the same time (Josiassen 2011; Riefler, Diamantopoulos, and Siguaw 2012). Indeed, some scholars even argue that COO only matters for certain consumer segments such as ethnocentric consumers (Samiee 2010; 2011). For ethnocentric consumers, knowing the origin of the products they purchase is important because not buying domestic is considered as inappropriate because it causes harm to the domestic economy (Shimp and Sharma 1987). This research aims to clarify how product ethnicity as a form of typicality influences and interacts with consumer ethnocentrism on preferences for domestic products. A controlled experiment with data drawn from a representative US household panel indicates that COO does matter, but, as expected, is contingent on both product typicality and consumer ethnocentrism. Based on realistic choices among several rental car options with varying degrees of typicality, we find that product typicality moderates the impact of consumer ethnocentrism on preferences towards domestic such that domestic country bias will be particularly strong when foreign products have a higher typicality. Furthermore, consumers prefer foreign products with a high typicality over foreign products with a low typicality if they are not ethnocentric. While such behaviour is rational, consumer ethnocentrism eventually neutralizes and even reverses the influence of foreign typicality on consumers’ preferences in that highly ethnocentric consumers rather choose foreign products of lower typicality than foreign products of higher typicality. The main contribution of our paper is three-fold. On the theoretical front, our paper extends research on home country bias and product ethnicity by offering insights related to the boundary conditions of COO effects, in light of special consumer segments such as ethnocentric consumers. On the methodological front, we offer an innovative way of analyzing COO effects that can overcome many criticisms raised on extant COO research. We thus offer a solution to Samiee’s (2009) call for more research using ecologically appropriate designs when analyzing COO effects. Finally, our paper has clear managerial implications. More concretely, our findings imply that also firms originating from countries with a favorable origin have to be careful when actively marketing their origin abroad, as they might be rejected by certain consumer segments.
