Consumer ethnocentrism and country of origin effects in Indonesia

While the fields of consumer ethnocentrism and country of origin research have been extensively researched, they have up to now been studied overwhelmingly from the perspective of developed countries. In contrast, this paper discusses the concept of consumer ethnocentrism and its impact on country of origin effects specifically in the context of a less developed country (Indonesia). In particular, while there is consistent evidence of a systematic preference by consumers in more developed countries for products made in the home country or in other more developed countries, there is little published investigation of these questions in less developed countries. The current empirical study of some 547 Indonesian consumers revealed that the level of consumer ethnocentrism was relatively high compared with previously published international studies. The study also found evidence of a strong country of origin effect in that the relationship between consumer ethnocentrism and perceived quality, perceived price, perceived value and purchase intentions towards locally made products were all positive and statistically significant. Most importantly, however, the link between consumer ethnocentrism and actual purchases, while positive, was found to be insignificant. These findings have important implications for both government policy makers and local and foreign-owned businesses.