Country of Origin and Ethnocentrism: an Analysis of Canadian and American Preferences Using Social Identity Theory

Garold Lantz, University of Manitoba
Sandra Loeb, University of South Dakota
[ to cite ]:
Garold Lantz and Sandra Loeb (1996) ,"Country of Origin and Ethnocentrism: an Analysis of Canadian and American Preferences Using Social Identity Theory", in NA - Advances in Consumer Research Volume 23, eds. Kim P. Corfman and John G. Lynch Jr., Provo, UT : Association for Consumer Research, Pages: 374-378.

Advances in Consumer Research Volume 23, 1996      Pages 374-378


Garold Lantz, University of Manitoba

Sandra Loeb, University of South Dakota

This study utilizes conjoint analysis in an exploratory analysis to ascertain the value consumers in Canada and the United States place on a product being from their own, or another, country. The resultant utilities are related to a consumer's level of consumer ethnocentrism. It is expected that consumers rating high in consumer ethnocentrism would rate products from their country significantly higher, and products from other countries significantly lower, than those with low levels of consumer ethnocentrism. The results were primarily as surmised, with a few unexpected results.

It is proposed that there is a conceptual difference between the part of the country of origin effect which can be explained by country image and the part explainable by nationalistic tendencies. This paper uses social identity theory to further explicate the role of the nationalistic tendencies in an exploratory empirical study. Our belief is that consumers who are highly ethnocentric (strong national social identity) will behave more favorably toward products from countries viewed similar to theirs than do those who exhibit lower levels of ethnocentricity.


The country of origin (COO) effect refers to the preference consumers may express towards a product based upon the country where it was made. Since the first academic study of the subject by Schooler (1965) research in the COO effect has been voluminous. However, there has been little theoretical development (for a review, see Samiee 1994). This paper offers social identity theory to explain one part of the COO effect, the home country bias.

The COO effect has typically been attributed to instances where country of origin is used as a cue for quality, or rather as a surrogate for quality attributes, particularly if other product information is missing (Bilkey and Nes, 1982; Hong and Wyer, 1989). If an objective assessment of the product in question cannot or has not been made, the perceived reputation of the country may be substituted. This is often referred to as "country stereotype" or "country image". Many studies (see for example Papadopolous and Heslop, ed. 1993) have focused on this aspect of the COO effect and in most instances it probably accounts for most of the COO effect.

Additionally, the COO effect involves the issue of loyalty to the home country. While not universal, the home country bias has often been noted (see Samiee 1994 for a review). Exceptions to the home country bias generally involve foreign countries with a particularly good reputation for certain products (Nagashima 1970; Cattin, Jolibert and Lohnes 1982). Despite the exceptions, recent research has made it increasingly apparent that a person may purchase domestic goods solely to favor the domestic economy as an expression of support (Olsen, Granzin and Biswas, 1994). While a large part of the COO effect is explainable by country image, this paper focuses on the home country bias. We seek to make the theoretical connection of the social identity element to the COO model and to begin fleshing out the role of social identity with an empirical study.

Social Identity Theory

Social identity theorists posit that the self-concept is made up of two distinct aspects; the personal identity and the social identity (Tajfel 1978; Turner 1982). The personal identity includes specific attributes of the individual such as competence, talent and sociability. The social identity is defined as "that part of an individual's self-concept which derives from his knowledge of his membership in a social group (or groups) together with the value and emotional significance attached to that membership" (Tajfel 1981, p.225). It is widely agreed that individuals feel a need to maintain a positive self-image or self-esteem (Festinger 1954). Social identity theorists believe that the need to maintain a positive self-esteem includes social identities as well as the personal identity (Luhtenan and Crocker 1992).

The central tenet of social identity theory is that people feel a desire and propensity to build a positive identity for themselves which may be manifested by their identification with various groups (Turner 1982; Tajfel 1981). These groups may include family, friends, the community, race, religion or nation.

There has been a limited amount of work done regarding nationalism in the country of origin context by Shimp and Sharma (1987) and others (Herche 1992; Netemeyer, Durvasula and Lichtenstein 1991). Shimp and Sharma's (1987) concept and the scale they developed to measure it, the Cetscale, concerns the extent to which individuals feel a desire or a duty to support the domestic economy in the face of foreign competition. In terms of social identity theory it can be said that consumers have a national identity. The national identity may be strong in some consumers and weak in other consumers. The Cetscale, which focuses on the purchase of products, measures the economic manifestation of the national identity.

The implications for a COO effect are that individuals seek out ways to distinguish their national social category from others. It is proposed that a portion of the COO effect may be due simply to a desire by people to distinguish their group from others when they are in a purchase situation.

It is hypothesized that this national identification is strong enough in some people to make them willing to show a preference for a domestic product when they could spend less for an imported product, while the national identification is weaker in others, leading them to switch to the lower priced imported product at a lower price differential.


Ethnocentrism is the term which has often been applied to the home country bias portion of the COO effect (Shimp and Sharma 1987). Generally speaking, it is a broad term which may apply to any social group and it mixes neatly with the social identity theory concept of ingroup favoritism. In an effort to explain racist behavior Sumner (1906) coined the term ethnocentrism to refer to the way people identify themselves as group members (ingroups) and distinguish themselves from others (outgroups). The ingroup sees itself in opposition to the outgroup; the ingroup being superior and the outgroup held in contempt. Ethnocentrism has been seen to increase when there is a perceived threat to the group (Campbell 1965). It is likely that the same phenomenon occurs when there is a perceived threat to the economic well being of the nation.

Ethnocentrism is defined in terms of ingroup/outgroup orientation where the ingroup is preferred and is seen in opposition to others. Relating this to the COO effect, the nation is the ingroup of interest and the threat to the group is given in an economic context. A person may make a reasoned judgment to support domestic products because it is good for the collective health of the economy of the country or the person may make a moral judgment that it is a duty. Ethnocentrism relates to social identity theory in a similar fashion; the social-identity group of interest is the nation.



It is hypothesized that most respondents have a preference for domestic products when price is equal, but that as the price differential increases, those with lower levels of national social identity will be more likely to choose products based on criteria other than the country of origin, such as price. In order to examine these relationships conjoint analysis will be used to examine the tradeoffs samples of Americans and Canadians are willing to make in evaluating the purchase of products from the United States, Canada and Mexico. Then, the differences in purchase preference between Americans and Canadians who are high and low in national identity, as manifested by their scores on the Cetscale, will be examined. Finally, some differences between Americans and Canadians will be examined.


Two groups of subjects were considered in this study, a Canadian group and an American group. The Canadian respondents for this survey were students from two classes of undergraduate marketing courses at a central Canadian university. There were seventy four respondents. The American respondents were students from undergraduate marketing classes at a university in central U.S.. There were one-hundred fourteen U.S. respondents.

Survey Design

This study seeks to isolate the home country bias aspect from the country image stereotype aspect of the COO effect. This will be accomplished in two ways: 1) by using real life samples of a rather mundane product, computer mouse pads, which are observably equal in quality; and, 2) by testing countries both where quality should and should not be an issue.

The product chosen to be tested is very important. Studies focusing on country image have shown that when a product is more complex, the country of origin is of increased importance to consumers (Heslop, Liefeld and Wall 1987). Also, country image is usually used as a surrogate for information to assess the quality of the product. Use of brand name products also have an impact on country image. In order to minimize the effect of country image, computer mouse pads were chosen because they are simple, nondistinctive and virtually generic. Additionally, actual examples of identical Mexican and American made mouse pads, and a very similar (differed in color) Canadian-made mouse pad were located, indicating that the product choice was realistic. Also, the student respondents were likely to have some familiarity with mouse pads.

Assuming that country image has been substantially removed due to the products being observably equal in quality, any COO effect detected should be explainable largely by variations in the respondents' personal characteristics. The characteristic of primary interest, national social identity, will be assessed using the Cetscale (Consumer Ethnocentric Tendency Scale) developed by Shimp and Sharma (1987). The Cetscale has been validated in several studies (Herche 1992; Netemeyer, Durvasula and Lichtenstein 1991).

Products were assessed by the respondents using a main effects conjoint analysis. There are several advantages to the use of conjoint analysis. Realistic product attributes can be assessed without drawing undue attention to any one, such as the country of origin. Conjoint analysis has been found to be an excellent means of segmenting consumers (Green and Krieger 1991). Finally, on other occasions it has been found to be an effective means of eliciting the COO effect without biasing the respondent (Johansson, Douglas and Nonaka 1985).

Canadian Survey

Actual examples of mouse pads illustrating two levels of color (blue and grey) and two levels of style (contoured edge and no contoured edge) were displayed for the respondents. Also, the label of one was read regarding the manufacturer's locations (Canada, the United States, and Mexico) to illustrate that the purported countries of manufacture were realistic. The subjects were not shown pads representing each combination in the conjoint, but rather representative mouse pads. Finally, it was stated that the prices given ($4.25, $4.36 and $4.47 CDN) were similar to the prices at which the mouse pads were actually offered for sale. This was done to assure respondents that they were being asked to make choices which were similar to choices they might actually have to make when selecting a computer mouse pad at a store. For the conjoint students were asked to rank nine products (attribute combinations of country of origin, price, style, and color). The nine combinations were selected using a fractional factorial selection process in the Conjoint Designer (Bretton-Clark 1988).

It is worth noting the closeness of the three prices. There is a low price, a medium price which is 2.5% higher and a high price which is 5.0% above the low price. This narrow price range was chosen for the managerial implications which can be drawn from the results, and so that price would not overwhelm the effects of other attributes. When observed in an actual retail setting, computer mouse pads from different countries were priced identically. Managers apparently believe that the country of origin is of little consequence. It is expected that when prices are the same or nearly the same, consumers will differentiate between products by some other means; in this case, by country.

When the conjoint was administered, respondents were presented with the following scenario: "You are in need of a computer mouse pad and have gone to the store to purchase one." Respondents were then asked to rank each combination of product attributes. The respondents then completed the questionnaire consisting of the Cetscale and other items.

American Survey

The survey administered to the 114 American respondents was the same except for two factors. First, the prices were spread farther apart: a base price of $3.06, a price 3.5% higher of $3.17, and a price 7% higher of $3.27. Second, the "style" factor of the Canadian survey was replaced by a "made of recycled materials" or "not made of recycled materials" label on the package. The changes were made to satisfy other research interests. Because of this, the conjoint portion of the studies are not directly comparable.


Results and Discussion of the Canadian Survey

The analysis was done in two parts. First, the overall group utilities were used in the conjoint analysis to establish the relative importance of each of the product attributes. The computer package Conjoint Analyzer, by Bretton-Clark was utilized. The sample was then broken down into two groups, those high and low on consumer ethnocentrism according to respondents' score on the Cetscale. Low and High consumer ethnocentrism was determined by looking for a natural split. The resultant segments were close to equal in size. The conjoint analysis for these two groups was compared.



The conjoint analysis yields group utilities which are preference ratings for each attribute at each level, and utilities for individual respondents at each attribute at each level. Group utilities show the relative importance of each attribute in the respondent's choosing a preference. The preference ratings for each level of each attribute show their importance relative to each other.

An examination of the overall group utilities of the conjoint portion of the study show that there is a significant country effect. Surprisingly, the effect for country (34.53%) is even greater than for price (32.03%). Due to the mundane, low involvement nature of the product being tested, it was expected that price would be the product attribute which was most important to consumers with country coming in second (Bruning, Lockshin and Lantz, 1993). This relative positioning is likely due to the narrow range of the prices. The colors and stylistic product attributes had overall utilities of 19.17% and 14.27%, respectively. The strong country effect shows that the COO can be found even under conditions where it should be minimal due to the removal of product quality as an issue.

In order to examine whether national identity would be manifested as home country bias, respondents were divided into two groups: those scoring high or low on Cetscale. Of the seventy four respondents, thirty-five were low and thirty-nine were high. A comparison of the group utilities of respondents high and low on consumer ethnocentrism shows a significant difference in the relative importance of price and country. Respondents low on consumer ethnocentrism rate price as most important (36.16%) while country is lower (24.69%). In fact, country is only slightly more important than color. For respondents high on consumer ethnocentrism, country is much higher (42.75%) while price is much lower (27%). This shows a decreased sensitivity to price for respondents high on consumer ethnocentrism, while respondents low on consumer ethnocentrism are sensitive to small changes in price.

The relative positioning of the Canadian, U.S. and Mexican group utilities, as seen in Table 1, indicate a strong positive utility for the Canadian product and a strongly negative utility for the Mexican product, while the U.S. product had a slightly positive utility. The positive utility for the Canadian product and the negative utility for the Mexican product was expected. This follows the general finding that domestic products are preferred and products from less developed countries are less preferred. There may be some residual stereotype effect despite the equivalent products. The difference between Canadian and U.S. products is more interesting.

Recent research by Heslop and Wall (1993) shows that typically, Canadians evaluate U.S. products as being essentially equal to Canadian products in terms of quality. Assuming that it is generally true, a difference in preference between U.S. and Canadian-made mouse pads must be explained by something other than country image, since country image is a surrogate for quality. An examination of responses of respondents high and low on consumer ethnocentrism may offer some explanation. Respondents low on consumer ethnocentrism have a much narrower range of preference, and in fact, are more positive towards U.S. products than are those which rank high in consumer ethnocentrism. Respondents high on consumer ethnocentrism, conversely, have a much greater preference for Canadian products than do those low in consumer ethnocentrism, and assess U.S. products lower.

Further, an analysis of variance indicates insignificant U.S.A. utility differences between Canadians who rate low and high in consumer ethnocentrism, and significant differences between low and high groups for both the Mexican and Canadian utilities. This analysis tends to support the research of Heslop and Wall (1993) cited above.

Results and Discussion of the American Survey

The survey of American respondents was analyzed similarly. An examination of the overall group utilities of the conjoint portion of the study show that there is, again, a significant country effect (see Table 2). The country effect is significantly higher than the price effect. This is true despite the fact that prices were spread farther apart than in the Canadian survey. A greater spread in prices should have increased the importance of price.

An examination of the frequency distribution of American respondents on the Cetscale showed that the mean was slightly higher. The American sample was divided into high and low respondents on the Cetscale, and the resultant groups were compared using ANOVA (Table 2). This comparison of the group utilities of respondents who were high and low on consumer ethnocentrism shows differences similar to the Canadian sample; insignificant differences between groups low and high in consumer ethnocentrism were found in utility placed on a product being from Canada, while significant differences were found between groups for the Mexican and American utilities.



Additionally, for those high on consumer ethnocentrism the importance of price dropped while the importance of country increased. Conversely, for the respondents who were rated low on consumer ethnocentrism, the importance of price increased while the importance of country decreased. What was surprising, however, was the magnitude of the difference between the American and Canadian respondents. Even among respondents low on consumer ethnocentrism, the importance of country, as reflected by the conjoint utility, remained relatively high. With the Canadian respondents, much of the differences between the groups were tradeoffs were between price and country. With the American respondents, there was less difference between the groups and there was less change in the importance of country.

Still, the differences cannot be explained solely by consumer ethnocentrism. Since there is a significant difference in utilities placed on U.S., Canadian, and Mexican products, neither the American nor the Canadian respondents simply made a distinction between domestic and foreign goods. They had a clear preference for one foreign good over another. The difference cannot be explained by national identification. Two possible explanations are: 1) that respondents did not accept that the products were of equal quality, and 2) that other social influences were active leading respondents to prefer Canadian products (or American products, in the case of the Canadian sample) over Mexican.

While consumer ethnocentrism alone does not explain the preference, social identity theory does offer possible explanations. Due to a considerable history of trade and social relations between Canada and the U.S. which is not present between Canada and Mexico, there is likely to be some shared identity between them. In recognition of this identity, a preference for U.S. over Mexican goods may be expected.


This study considers the effect of national identity as a means of explaining the portion of the country of origin effect which is not attributable to country image. An empirical test of national identity, as manifested by consumer ethnocentrism, was made to substantiate this concept using respondents from the U.S. and Canada.

The first conclusion is that, when dealing with mundane, low involvement products, undifferentiated by price, the country of origin is an important variable for all respondents. Second, people do appear to have identification with nation which can be expressed by a purchase intention. When dealing with mundane, low involvement products between which there are small differences in price people with greater consumer ethnocentrism are willing to pay a higher price to buy domestic products, while those who are lower in consumer ethnocentrism are willing to switch to imported products.

Managerial Implications

Retailers who believe that Mexican-made goods of equal quality should be priced equal to domestic goods should re-evaluate this view, particularly if there is greater profitability in selling Mexican-made products due to a lower cost of production. Companies which price these goods lower may achieve greater volume; maximizing profitability.

At the very least, consumer ethnocentrism should be considered useful for segmenting. The results indicate that some portion of the consuming public is willing to pay somewhat more for products made domestically. However, it should be reiterated that this result is highly dependent upon the product being a mundane, low involvement product.


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