Impact of Country of Origin Effect (Coe) on Consumer Purchase Intentions

Abstract

With the increasing trend of globalization, there is an influx of foreign goods and services into a country and therefore the country of origin effect (COE) is significantly becoming a more important driver in consumer purchase intentions. Highlighting two dimensions of COE, namely, performance equity and emotional equity, this study examines the impact of COE on consumer purchase intentions in favour of Indian made products of Sri Lankan consumers. Further, the study investigates whether purchase intentions in favour of Indian made products differ based on the ethnicity of the consumer. Data collected from 321 students selected from a cohort of postgraduates in business management from the University of Colombo, Sri Lanka, were analyzed using hierarchical regression and ANOVA with Tukey's HSD test. Moreover, factor analysis with Varimax Kaiser Normalization was employed to generate the factors. Results indicate that both emotional and performance dimensions significantly influence consumer purchase intentions in favour of Indian made products. With regard to ethnicity, the results show that there exists a difference between Sinhalese and Tamils in their preference for Indian made products.