Interaction of country of origin effects and perceived risk in a capital equipment setting

Joseph V Scuralli, Pace University


This study is concerned with the interaction of country-of-origin effects and perceived risk in capital equipment situations. A survey instrument containing an "in-basket" test was sent out to approximately 1400 subjects and was completed by 102 industrial users of twin screw extruders used in the production of plastic compounds. The subjects were all American-based companies and were drawn from a national sample. The hypothesis testing was based on the within-subjects results of a repeated measures analysis of variance technique. While the small sample size and low response rate limit the generalizibility of the results, the research reveals that a country-of-origin bias does exist in purchasers of capital equipment. A significant difference in levels of perceived risk is found in buyers considering purchasing Chinese, German and American machinery. Various risk reduction strategies are tested, including the use of customer reference lists, warranty & performance guarantees, trial performance runs and trade show participation. Three risk reducers are found to cause a significant reduction in perceived risk, namely, the use of a customer reference list, the offer of warranty & performance guarantees and offer of trial performance runs. Risk reduction strategies are tested for significant effects individually and as a group. Country-of-origin effects are modified by risk reduction strategies, but even after all are used, a significant country of origin effect remains. The study also examines sources of information about twin screw extruders, the reliability of these sources, the features of twin screw extruders, the importance of various factors in the purchase of twin screw extruders, and the subjects' years of experience.

Subject Area


Recommended Citation

Scuralli, Joseph V, "Interaction of country of origin effects and perceived risk in a capital equipment setting" (1996). ETD Collection for Pace University. AAI9801903.



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