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Do Quality, Environmental, and Social (QES) Certifications Improve International Trade? A Comparative Grey Relation Analysis of Developing vs. Developed Countries

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  • Ikram, M.
  • Sroufe, Robert
  • Rehman, E.
  • Shah, S.Z.A.
  • Mahmoudi, A.

Abstract

The purpose of this empirical study is to undertake a comparative analysis of developing vs. developed countries based on adoption of ISO 9001, ISO 14001 and SA8000 certifications and their impact on international trade. We utilize a combination of models including Deng’s Incidence Analysis (GIA), Absolute Degree GIA, Second Synthetic Degree GIA (SSDGIA) and Conservative (maximin) approach to inform decision making under uncertainty. Data was collected from the ISO and SAI official websites of the top fifteen certified countries for the period of 2002 to 2017. Additionally, export of goods and services data was gathered from the World Bank. The results reveal that the adoption of Quality, Environment and Social (QES) standards have a positive and significant effect on exports of goods and services in developing countries. While this is interesting, we also find that ISO 14001 certification contributes more to economic development than ISO 9001 and SA8000 in both developed and developing countries, with developing countries showed superior performance. This study is the first of its kind in evaluating the association of QES standards on international trade in developed and developing countries while using multiple grey relational analysis models. Finally, this article proposes recommendations for policymakers to improve international trade and sustainable development.

Suggested Citation

  • Ikram, M. & Sroufe, Robert & Rehman, E. & Shah, S.Z.A. & Mahmoudi, A., 2020. "Do Quality, Environmental, and Social (QES) Certifications Improve International Trade? A Comparative Grey Relation Analysis of Developing vs. Developed Countries," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 545(C).
    • Handle: RePEc:eee:phsmap:v:545:y:2020:i:c:s0378437119319466
    DOI: 10.1016/j.physa.2019.123486
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