Going Global: Markups and Product Quality in the Chinese Art Market

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe analyze two reasons for export prices to be different across markets-namely, quality differentiation and variable markups-and attempt to parse their relative importance and some of their underlying drivers. To overcome the substantial measurement issues in this task, we consider a particular industry as a special case: Chinese fine art. The simplicity of the supply side of art vis-á-vis marginal cost and the wealth of data on its quality characteristics make it possible to separately identify the markup and quality components of international relative prices for Chinese artworks. Through this lens, we trace the process of growth and internationalization of Chinese art since the year 2000. We find strong support for quality sorting into international markets at both the level of artist and artwork, as well as substantial markup differences across destinations. Using a structural model of endogenous quality choice by Feenstra and Romalis (2012), we argue that much of the international quality premium is driven by per unit distribution costs (whether physical or informational) rather than destination-specific preferences for quality.

The Marketing Value of Social Media Tools to Business Level Strategy

“…Contemporary marketing is related to the process of planning and executing the pricing and distribution of goods and services through co-creation, shared values and is considered inefficient; due to the low conversion rate of typical advertising types and also due to the fact that customer interest cannot be adequately determined These considerations need to be evaluated on a large scale in order to adopt suitable methods for the marketing of products (Bai et al, 2013). Different approaches are therefore adopted by considering the effectiveness of the marketing processes used throughout the targeted market segments, and thus, the selection of the contemporary or the noncontemporary techniques helps in bringing out positive results for the organization concerned.…”