Resolving the Paradox of Social Standards and Export Competitiveness
AbstractOver the last decade there has been increasing international pressure on countries to raise social standards (i.e., production standards based on environmental and labor conditions). Currently, the World Trade Organization does not allow countries to impose minimum standards on imports based on environmental or labor standards because it is assumed to undermine competition. There is no consensus in the empirical literature, however, to support this claim. In fact, the evidence suggests that while stronger environmental standards hurt competitiveness, stronger labor standards do the opposite. This paper offers one possible explanation for this paradox. In a simple model of incomplete information, externally-imposed standards may either increase or decrease the competitiveness of infant firms from developing countries depending on the degree of complementarity between the standard and the production of high-quality goods.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Elon University, Department of Economics in its series Working Papers with number 2008-03.
Length: 25 pages
Date of creation: Feb 2008
Date of revision:
Contact details of provider:
Postal: 2700 Campus Box Elon College, NC 27244-2010
Phone: +1(336) 278-6000
Fax: +1 (336) 278-5952
Web page: http://www.elon.edu/e-web/academics/business/economics/
More information through EDIRC
Other versions of this item:
- Stephen DeLoach & Jayoti Das, 2008. "Resolving the paradox of social standards and export competitiveness," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 17(4), pages 467-483.
- F18 - International Economics - - Trade - - - Trade and Environment
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard Chisik, 2010.
"Export Industry Policy and Reputational Comparative Advantage,"
017, Ryerson University, Department of Economics.
- Chisik, Richard, 2003. "Export industry policy and reputational comparative advantage," Journal of International Economics, Elsevier, vol. 59(2), pages 423-451, March.
- Kyle Bagwell & Robert W. Staiger, 1988.
"The Role Of Export Subsisies When Product Quality Is Unknown,"
NBER Working Papers
2584, National Bureau of Economic Research, Inc.
- Bagwell, Kyle & Staiger, Robert W., 1989. "The role of export subsidies when product quality is unknown," Journal of International Economics, Elsevier, vol. 27(1-2), pages 69-89, August.
- Kyle Bagwell & R. Staiger, 1987. "The Role of Export Subsidies When Product Quality is Unknown," Discussion Papers 758, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Shapiro, Carl, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, MIT Press, vol. 98(4), pages 659-79, November.
- Uri Ronnen, 1991. "Minimum Quality Standards, Fixed Costs, and Competition," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 490-504, Winter.
- Grossman, Gene M & Horn, Henrik, 1988.
"Infant-Industry Protection Reconsidered: The Case of Informational Barriers to Entry,"
The Quarterly Journal of Economics,
MIT Press, vol. 103(4), pages 767-87, November.
- Gene M. Grossman & Henrik Horn, 1989. "Infant-Industry Protection Reconsidered: The Case of Informational Barriers to Entry," NBER Working Papers 2159, National Bureau of Economic Research, Inc.
- Klaus Conrad, 2005. "Price Competition and Product Differentiation When Consumers Care for the Environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 31(1), pages 1-19, 05.
- Brian R. Copeland & M. Scott Taylor, 2003.
"Trade, Growth and the Environment,"
NBER Working Papers
9823, National Bureau of Economic Research, Inc.
- Jayoti Das & Stephen DeLoach, 2003. "Strategic trade policy in the presence of reputation spillovers," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 12(2), pages 101-116.
- Leland, Hayne E, 1979. "Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1328-46, December.
- Wolfgang Mayer, 1984. "The Infant-Export Industry Argument," Canadian Journal of Economics, Canadian Economics Association, vol. 17(2), pages 249-69, May.
- Richard Chisik, 2010.
"Reputational Comparative Advantage and Multinational Enterprise,"
016, Ryerson University, Department of Economics.
- Richard Chisik, 2002. "Reputational Comparative Advantage and Multinational Enterprise," Economic Inquiry, Western Economic Association International, vol. 40(4), pages 582-596, October.
- Eugene Beaulieu & James Gaisford, 2002. "Labour and Environmental Standards: The 'Lemons Problem' in International Trade Policy," The World Economy, Wiley Blackwell, vol. 25(1), pages 59-78, 01.
- David Kucera & Ritash Sarna, 2006. "Trade Union Rights, Democracy, and Exports: a Gravity Model Approach," Review of International Economics, Wiley Blackwell, vol. 14(5), pages 859-882, November.
- Shapiro, Carl, 1986. "Investment, Moral Hazard, and Occupational Licensing," Review of Economic Studies, Wiley Blackwell, vol. 53(5), pages 843-62, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Barbour).
If references are entirely missing, you can add them using this form.