Country-of-Origin Effects and Willingness to Pay 19 Are Consumers Really Willing to Pay More for a Favorable Country Image? A Study of Country-of-Origin Effects on Willingness to Pay Nicole Koschate-Fischer, Adamantios Diamantopoulos, and Katharina Oldenkotte ABSTRACT Price-related consequences of the country-of-origin (COO) cue have received limited attention in extant literature. In this study, the authors draw from equity theory and cue utilization theory and investigate (1) whether a brand’s COO affects a consumer’s willingness to pay and (2) the extent to which the consumer’s familiarity with the brand moderates this relationship. The results of three complementary experimental studies reveal that COO indeed has a positive impact on willingness to pay. Furthermore, the authors find a negative moderating influence of brand familiarity on the COO effect in a high-involvement setting but not in a low-involvement setting. The authors discuss the theoretical and managerial implications of the findings, and they identify directions for further research. Keywords: country of origin, willingness to pay, brand familiarity, experimental research O ne of the oldest and most persistent concerns in international marketing is whether the origin of a product makes it more or less preferable to con- sumers. Country of origin (COO) serves as an extrinsic informational cue for consumers’ perceptions and evaluations of a product (Verlegh and Steenkamp 1999), and research on COO effects—that is, the impact that cognitive, affective, and normative associations with a particular country have on consumer attitudes—shows that a product’s COO acts as a signal of product quality, influences consumers’ perceptions of risk and value, and directly affects the likelihood of purchase (for recent reviews of COO research, see Jaffe and Nebenzahl 2006; Pharr 2005; Phau and Chao 2008; Wilcox 2005). Various articles in the business press also underscore the relevance of the COO effect. For example, after several recalls and disasters associated with products made overseas (e.g., lead in toys), U.S. consumers became sen- sitive to product origins, and many now actively search for products “Made in the USA” (Martin 2007). Yet despite the acknowledged importance of COO effects, their price-related consequences remain neg- lected, such that “very little is known regarding the influ- ence of COO on pricing decisions” (Agrawal and Kamakura 1999, p. 257). Extant COO research has mainly focused on consumers’ quality evaluations and intentions to purchase a product. However, several meta- analyses and recent empirical studies indicate that the COO effect loses its strength when purchase intentions, Nicole Koschate-Fischer is Professor of Marketing (e-mail: nicole.koschate-fischer@wiso.uni-erlangen.de), and Katharina Old- enkotte is a postdoctoral researcher (e-mail: katharinaoldenkotte@ gmx.de), GfK-Chair of Marketing Intelligence, University of Erlangen–Nuremberg. Adamantios Diamantopoulos is Professor of International Marketing, Chair of International Marketing, Univer- sity of Vienna (e-mail: adamantios.diamantopoulos@univie.ac.at). The authors thank the Dr. Theo and Friedl Schöller Research Center for Business and Society and the Hans Frisch-Foundation for supporting this research study. They also thank the four anonymous JIM review- ers for useful comments over several review rounds. Journal of International Marketing ©2012, American Marketing Association Vol. 20, No. 1, 2012, pp. 19–41 ISSN 1069-0031X (print) 1547-7215 (electronic)