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Standards and export decisions: Firm-level evidence from developing countries

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Author Info

  • Maggie Xiaoyang Chen
  • John Wilson
  • Tsunehiro Otsuki

Abstract

Standards and technical regulations set in importing countries have become a rising concern to exporters, especially to those in developing countries. This paper examines the importance of various types of standards in developing-country firms' export decisions. Drawn from the World Bank Technical Barriers to Trade (TBT) Survey database, we find that different types of standards exhibit sharply distinct relations with firms' intensive and extensive margins of exports. Quality standards are positively correlated not only with firms' average export volume across markets and products but also their export scope, measured by the number of export markets and products. A similar relationship is found between labeling requirements and export scope. Certification procedures, however, are associated with a significant decline in the number of export markets and export products. Our results suggest that different approaches should be taken to address each type of technical regulations. Not all standards need to be negotiated away to boost trade, but negotiations on certification procedures with the aim of reaching Mutual Recognition Agreements (MRAs) can help firms improve economies of scale and scope.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.

Volume (Year): 17 (2008)
Issue (Month): 4 ()
Pages: 501-523

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Handle: RePEc:taf:jitecd:v:17:y:2008:i:4:p:501-523

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Related research

Keywords: standards; export decision; intensive margin; extensive margin;

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Cited by:
  1. Hezekiah Agwara & Philip Auerswald & Brian Higginbotham, 2014. "Algorithms and the Changing Frontier," NBER Working Papers 20039, National Bureau of Economic Research, Inc.
  2. Vanzetti, David & Nikolic, Aleksandra, 2011. "Potential Impacts of WTO Accession on the Agribusiness Sector in Bosnia and Herzegovina," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114611, European Association of Agricultural Economists.
  3. Schuster, Monica & Maertens, Miet, 2013. "Food Standards, Heterogeneous Firms and Developing Countries’ Export Performance," Working Papers 152084, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
  4. Hezekiah Agwara & Philip Auerswald & Brian Higginbotham, 2013. "Algorithms and the Changing Frontier," NBER Chapters, in: The Changing Frontier: Rethinking Science and Innovation Policy National Bureau of Economic Research, Inc.

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