Speaker:Professor Chengze Fan (Lingnan University)

Host:Assistant Professor Xie Cong (China Institute for Economic Research, Liaoning University)

Guest Introducer:Professor Ma Xiangjun (China Institute for Economic Research, Liaoning University)

Time:13:30–15:00 (Beijing Time), Wednesday, May 27, 2026

Venue:Room 112, Economics Building, Puhe Campus, Liaoning University

Online Access:Tencent Meeting ID: 654-132-670

Language:Chinese/English

Abstract:

This paper examines quality signaling in developing countries where product quality varies widely and sophisticated marketing strategies common in developed economies are lacking. Inspired by business practices in China’s early development stage, we propose that firms can signal quality by highlighting exports to developed countries. We develop a two-country model where domestic consumers observe whether a firm exports to a developed country with a rigorous quality monitoring system. By analyzing firms’ signaling and imitation strategies, we characterize the boundary conditions under which separating, pooling, and hybrid equilibria arise. To enhance signaling effectiveness, we introduce ecolabeling as a supplementary signal, whose credibility is typically backed by reputable international environmental organizations. We show that obtaining a costly ecolabel not only helps differentiate high- from low-quality products in the domestic market but also generates global environmental benefits. An environmental certifier can strategically set the ecolabel fee, creating a trade-off between pollution abatement efforts in the developing country and the quality of imports received by the developed country.

Speaker Profile:

Professor Chengze Fan is an economics professor at Lingnan University, Hong Kong, where he has been teaching since receiving his Ph.D. in Economics from Brown University in 1994. He studied at Xiamen University and Brown University. He has published three academic books in socioeconomics: Vanity Economics: An Economic Exploration of Sex, Marriage and Family (Edward Elgar Publishing, 2014), Culture, Institution, and Development in China: The Economics of National Character(Routledge, 2016), and The Socioeconomics of Nationalism in China: Historical and Contemporary Perspectives (Taylor & Francis, 2022). He teaches his first book in his course "Economics of the Family," where it has been well received by students. Drawing on the theories and materials from his second and third books, he has completed the first draft of a full-length historical novel, The Great Qing's Taizong: Hong Taiji. Additionally, Professor Fan has published over fifty articles in international journals, including the International Economic Review, Journal of Development Economics, Journal of Economic Behavior and Organization, Journal of Public Economics, and Review of Economics and Statistics.