DP6026 The Impact of ISO 9000 Diffusion on Trade and FDI: A New Institutional Analysis

Author(s): Joseph A. Clougherty, Michal Grajek
Publication Date: December 2006
Keyword(s): FDI, institutions, trade, transaction costs
JEL(s): C51, F23, L31
Programme Areas: Industrial Organization, International Trade and Regional Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=6026

The effects of ISO 9000 diffusion on trade and FDI have gone understudied. We employ panel data reported by OECD nations over the 1995-2002 period to estimate the impact of ISO adoptions on country-pair economic relations. We find ISO diffusion to have no effect in developed nations, but to positively pull FDI (i.e., enhancing inward FDI) and positively push trade (i.e., enhancing exports) in developing nations.