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M. Matsumoto et al.
Association of Southeast Asian Nations (ASEAN) is a regional political and
economic organization comprising ten countries in Southeast Asia. ASEAN mainly
aims to curb regional measures that lead to inefficiencies in global economic integration (Lloyd and Smith 2004). Until the late-1990s, the increase in economic interdependence in the region took place without any formal framework of economic
cooperation. While there has been a strengthening of its institutions in recent years,
Schwartz and Villinger (2004) argue that ASEAN does not have a strong framework. It lacks a formal, detailed, and binding options which enable the institution
to prepare, enact, coordinate and execute policies (Hew 2006). It is argued that this
weak institutional structure “has been a major reason for the relatively low impact
of ASEAN’s initiatives to reduce tariffs and eliminate non-tariff barriers” (Hew
2006). Some ASEAN members intentionally restrict imports of goods to protect their
domestic industries (Kojima 2017). In the case of trade of remanufacturing, “unintentional trade restrictions on cores and [remanufactured products] exist” (Kojima 2017,
p. 642). Whether intentional or not, a government’s restrictive trade policy can impact
businesses by making it more challenging for inbound and outbound supply chains
to trade across international borders. Therefore, it is essential for ASEAN countries
to facilitate trade through harmonization of logistics policies and international trade
procedures to lower total costs of production (Nguyen et al. 2016).
11.2.3 Market Barriers: Building Trusts in Remanufactured
Products
Credible quality certifications can guarantee product quality, and help in mitigating
consumers’ perceived risks of remanufactured products (Michaud and Llerena 2011;
Kissling et al. 2013; Wang et al. 2013). Building trust and confidence in remanufactured products is vital because the remanufacturing started receiving wider
recognition since 1970s in the US (Hormozi 1997). Certification from authorized
parties provides strict guidelines for remanufactured products or remanufacturing
processes and can “reduce the frequency and mitigate consequences of market failures” (Vertinsky and Zhou 2000, p. 231). Credible quality certifications assure the
consumers regarding product quality and thus help mitigate the consumers’ perceived
risks of remanufactured products (Michaud and Llerena 2011, Kissling et al. 2013;
Wang et al. 2013).
Matsumoto et al. (2018) found that certifications of remanufactured auto parts
influence purchase intentions. They show that, in the Southeast Asian countries,
consumers are more willing to purchase certified remanufactured auto parts than
uncertified ones. They find that automobile OEMs are trusted the most, followed
by those certified by remanufacturing industrial associations, international standard
organizations, government or public organizations, and remanufacturing companies.
Certifications provide information regarding environmentally friendly features of
remanufactured products, including energy saving, extending the lives of landfills,
and reducing air pollution.
M. Matsumoto et al.
Association of Southeast Asian Nations (ASEAN) is a regional political and
economic organization comprising ten countries in Southeast Asia. ASEAN mainly
aims to curb regional measures that lead to inefficiencies in global economic integration (Lloyd and Smith 2004). Until the late-1990s, the increase in economic interdependence in the region took place without any formal framework of economic
cooperation. While there has been a strengthening of its institutions in recent years,
Schwartz and Villinger (2004) argue that ASEAN does not have a strong framework. It lacks a formal, detailed, and binding options which enable the institution
to prepare, enact, coordinate and execute policies (Hew 2006). It is argued that this
weak institutional structure “has been a major reason for the relatively low impact
of ASEAN’s initiatives to reduce tariffs and eliminate non-tariff barriers” (Hew
2006). Some ASEAN members intentionally restrict imports of goods to protect their
domestic industries (Kojima 2017). In the case of trade of remanufacturing, “unintentional trade restrictions on cores and [remanufactured products] exist” (Kojima 2017,
p. 642). Whether intentional or not, a government’s restrictive trade policy can impact
businesses by making it more challenging for inbound and outbound supply chains
to trade across international borders. Therefore, it is essential for ASEAN countries
to facilitate trade through harmonization of logistics policies and international trade
procedures to lower total costs of production (Nguyen et al. 2016).
11.2.3 Market Barriers: Building Trusts in Remanufactured
Products
Credible quality certifications can guarantee product quality, and help in mitigating
consumers’ perceived risks of remanufactured products (Michaud and Llerena 2011;
Kissling et al. 2013; Wang et al. 2013). Building trust and confidence in remanufactured products is vital because the remanufacturing started receiving wider
recognition since 1970s in the US (Hormozi 1997). Certification from authorized
parties provides strict guidelines for remanufactured products or remanufacturing
processes and can “reduce the frequency and mitigate consequences of market failures” (Vertinsky and Zhou 2000, p. 231). Credible quality certifications assure the
consumers regarding product quality and thus help mitigate the consumers’ perceived
risks of remanufactured products (Michaud and Llerena 2011, Kissling et al. 2013;
Wang et al. 2013).
Matsumoto et al. (2018) found that certifications of remanufactured auto parts
influence purchase intentions. They show that, in the Southeast Asian countries,
consumers are more willing to purchase certified remanufactured auto parts than
uncertified ones. They find that automobile OEMs are trusted the most, followed
by those certified by remanufacturing industrial associations, international standard
organizations, government or public organizations, and remanufacturing companies.
Certifications provide information regarding environmentally friendly features of
remanufactured products, including energy saving, extending the lives of landfills,
and reducing air pollution.