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In contested and competitive global markets, traders, visitors and investors make decisions based on what they have read and heard. According to Dinnie (2010:85),
“(…) all nations navigate through the complexity of the modern world armed with a few simple clichés, and these form the background of our opinions, even if we are not fully aware of this and do not always admit it to ourselves. Paris is about style, Japan about technology, Switzerland about wealth and precision, Rio de Janeiro about carnival and football, Tuscany about the good life, and most African nations about poverty, corruption, war, famine and disease.”
It is thus critical to note that people who are concerned about themselves and their countries should make every effort to develop informed, fair and balanced opinions about other people and their countries. Societies make conclusions based on the stereotypes associated with places and people. These stereotypes, whether favourable or adverse, profoundly influence the behaviour of people concerning others, citizens, organisations, governance systems, and products. Although this may genuinely be unfair, one cannot do anything to stop that. It is challenging a nation to convince people across the world to have better understanding of the richness of other countries and their cultures (Anholt, 2007b:13).
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Direct Investment (FDI) inflows, tourism, exports, and to talent? Kalamova and Konrad (2009:21) established in their study a positive correlation of nation brand performance and Foreign Direct Investment.
2.5.1 Influence of Nation Brand on Tourism
Positive nation brands enjoy a relative pull effect for tourist activity in their countries.
According to Dinnie (2010:85), if a nation is essentially having tourist appeal, it may also attract market-seeking investors considering investments in hotel infrastructure, resorts or provision of travel and holiday services. The attractive nation brand would trigger ripple effects that translate to a trajectory of tourism-based development. Correspondingly, business tourism, ecotourism, religious tourism, sporting tourism can potentially boost the image of a nation as a destination.
2.5.2 Influence of Nation Brand on Exports
There is a positive knock-on effect on a nation’s products arising from its nation brand associations. Joseph (2016:4) observes that the German nation brand is an integral cog in the development and growth of exports arising from the ‘Made in Germany’ effect. There is therefore a clear positive association between the nation brand and the nation’s export brands in what is technically referred to as the country of origin (COO) effect. A nation that leverages on positive COO effect, a favourable ‘made in’ association with quality, durability, reliability, status and other affirming stereotypes, tends to export more, attract both efficiency and market-seeking investors and receive more visitors.
2.5.3 Influence of Nation Brand on Governance
Nation brand image potentially influences the behaviour of national leadership with regards government policy at both domestic and international levels. The leadership of a regional or international powerhouse is essentially compelled to behave in such a way that is in keeping with the country’s reputation and image. The governance approach then affects the other cogs that make up the nation brand. Hannigan and Richards (2017:94) aver that successful branding persuades stakeholders to support government development plans. Governance factors, which include government policy on international relations, investment, trade,
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tourism, bureaucracy, property rights, and monetary control, are intrinsic for nation brand stakeholders involved in perception building.
2.5.4 Effect of Nation Brand on Investment and Immigration
The perception and image of a country’s socio-economic circumstances influences prospective investors and immigrants’ willingness to settle in each nation.
Papadopoulos, Hamzaoui-Essoussi and El Banna (2016:615-628) observe that whilst there are a number of reasons that influence investment decisions and behaviour, nation brand effect plays a part in the process. The image of a country has a significant bearing on investment decisions given that investment projects demand re-location (temporary or otherwise) to the country by the investor or an executive team. The practical implication of this is that countries perceived to be hostile or non-attractive constitute a disincentive to travel and investment.
2.5.5 Effect of a Nation Brand on People
Browning (2015:156) submits that nation branding processes should be considered as a state response to the need to stimulate citizens’ and the entire nation’s sense of “ontological security and (self)-esteem”. He cites such branding campaigns as “Cool Britannia,”
“Incredible India,” “Creative Denmark,” “Iceland Naturally,” and “Chile, All Ways Surprising” having a domino effect on both the external and internal audience. The question of national sentiment and social cohesion are gaining prominence for governments in this age of “global nationalism,” (Sklair 2001). Aronczyk (2016:14) posits that the debate on nation branding is on its role in a milieu of new nationalism characterised by ugly and antagonistic national sentiment. Volcic and Andrejevic (2011:607) opine that nation branding offers a viable option for people’s allegiances in times where philosophies and political agendas are losing relevance. Nation branding activity tends to provide a unique spirit of affiliation and sanctuary. It is viewed as contemporary form of nationalism that seeks to remind citizens who they are, while propping their yearning for national collectivism thus increasing the sense of pride in their nation (Varga, 2016:14).
53 2.5.6 Effect of Culture on Nation Brands
The perception of a nation’s way of life, historical background and milestones has the potential to influence stakeholder behaviour. Smallbone (2008:2) opines that in countries seeking to mobilise FDI, visitor traffic and exports, policy makers should realise that they compete with a host of other nations sharing similar characteristics, thereby undermining their competitive position. The author further warns of the ‘race to the bottom’ in which nations end up competing on financial or economic terms to the level of jeopardising each other. As with business strategy, competition between places based on non-price advantages is ultimately more sustainable than that based on price alone (Smallbone, 2008:2). Significantly, according to a 2007 research by UNIDO, investors rank incentive packages 13th on factors influencing investment decision, after such aspects as quality of life (11th), and market potential (8th) (UNCTAD, 2011:13). The ranking means that the investment incentives often extended by governments to prospective international investors are, to an extent insignificant in the global market space.