Impact of Trade Protectionism on Firm’s Brand Strategy: Evidence from an Emerging Economy

2020. No. 4469.

Rebiazina V. A., Kusraeva O., Krasnikov A. V.

In the current economic environment characterized by subdued potential growth and antiglobalization rhetoric, the risk of protectionism and trade barriers has risen. The World Trade Organization (WTO) recently alerted about worrying trend that the rate of new trade restrictive measures such as tariff increases, stricter customs procedures, imposition of taxes and export duties introduced by G20 countries in the first half 2018 was twice as high as during same period in 2017 and out-numbered measures aimed at facilitating trade (WTO 2018). Moreover, an increase in within-country income inequality during the period of rapid globalization has fueled an intense debate about the benefits of trade liberalization in emerging economies (Mohan 2018). As a result, pressured by ongoing structural changes, the policymakers in these markets are tempted to shape commercial relationships between states in order to protect domestic industries from import competition. Simultaneously, the emerging markets experience raise of nationalism which is reflected in increasing preference for domestic brands and negative perceptions of global brands (Lindner 2016). Protectionist policies have been implemented by many countries despite the fact that most observers agree that the world economy generally benefits from free trade (Baggs and Brander 2006). Obviously, such actions have impact on marketing and branding strategies of firms domiciled or hosted in emerging markets (Reagan 2018).

Keywords: natural experiments, trade barriers, protectionism, emerging markets, Emerging economy, brand orientation, brand awareness, Brand Differentiation, Brand Image, brand strategy, firm brand strategy, global brand