DP9047 International Standards and International Trade: Empirical Evidence from ISO 9000 Diffusion
|Author(s):||Joseph A. Clougherty, Michal Grajek|
|Publication Date:||July 2012|
|Keyword(s):||Networks, Standards, Technical Trade Barriers|
|JEL(s):||C51, F13, L15|
|Programme Areas:||Industrial Organization, International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=9047|
Empirical scholarship on the standards-trade relationship has been held up due to methodological challenges: measurement, varied effects, and endogeneity. Considering the trade-effects of one particular standard (ISO 9000), we surmount methodological challenges by measuring standardization via national penetration of ISO 9000, allowing standardization to manifest via multiple (quality-signaling, information/compliance-cost, and common-language) channels, and using instrumental variable, multilateral resistance and panel data techniques to overcome endogeneity. We find evidence of common-language and quality-signaling augmenting country-pair trade. Yet, ISO-rich nations (most notably European) benefit the most from standardization, while ISO-poor nations find ISO 9000 to represent a trade barrier due to compliance-cost effects.