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Information asymmetries as trade barriers: ISO 9000 increases international commerce

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  • Matthew Potoski

    (Political Science Department, Iowa State University)

  • Aseem Prakash

    (Department of Political Science, University of Washington)

Abstract

Spatial, cultural, and linguistic barriers create information asymmetries between buyers and sellers that impede international trade. The International Organization for Standardization's ISO 9000 program is designed to reduce these information asymmetries by providing assurance about the product quality of firms that receive its certification. Based on analyses of a panel of 140 countries from 1994 to 2004, we find that ISO 9000 certification levels are associated with increases in countries' bilateral exports, particularly for developing countries' exports, which may be due to their more severe quality assurance challenges. © 2009 by the Association for Public Policy Analysis and Management.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

Volume (Year): 28 (2009)
Issue (Month): 2 ()
Pages: 221-238

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Handle: RePEc:wly:jpamgt:v:28:y:2009:i:2:p:221-238

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Web page: http://www3.interscience.wiley.com/journal/34787/home

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  7. Terlaak, Ann & King, Andrew A., 2006. "The effect of certification with the ISO 9000 Quality Management Standard: A signaling approach," Journal of Economic Behavior & Organization, Elsevier, vol. 60(4), pages 579-602, August.
  8. James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
  9. Andrew K. Rose, 2002. "Do We Really Know that the WTO Increases Trade?," NBER Working Papers 9273, National Bureau of Economic Research, Inc.
  10. M. K. Haener & Martin K. Luckert, 1998. "Forest Certification: Economic Issues and Welfare Implications," Canadian Public Policy, University of Toronto Press, vol. 24(s2), pages 83-94, May.
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Cited by:
  1. Arimura, Toshihide & Iguchi, Hakaru & Michida, Etsuyo, 2014. "Product-related environmental regulation and voluntary environmental actions : impacts of RoHS and REACH in Malaysia," IDE Discussion Papers 454, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  2. Goedhuys, Micheline & Sleuwaegen, Leo, 2013. "The Impact of International Standards Certification on the Performance of Firms in Less Developed Countries," World Development, Elsevier, vol. 47(C), pages 87-101.
  3. Tarasov, Alexander, 2010. "Per Capita Income, Market Access Costs, and Trade Volumes," Discussion Papers in Economics 11494, University of Munich, Department of Economics.

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