International Standards and International Trade: Empirical Evidence from ISO 9000 Diffusion

Joseph A. Clougherty, Michal Grajek

NBER Working Paper No. 18132
Issued in June 2012
NBER Program(s):   IO   ITI   PR

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.

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Document Object Identifier (DOI): 10.3386/w18132

Forthcoming: International Standards and International Trade: Empirical Evidence from ISO 9000 Diffusion, Joseph A. Clougherty, Michał Grajek. in Standards, Patents and Innovations, Simcoe, Agrawal, and Graham. 2014

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