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

Author

Listed:
  • 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.

Suggested Citation

  • Maggie Xiaoyang Chen & John Wilson & Tsunehiro Otsuki, 2008. "Standards and export decisions: Firm-level evidence from developing countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 17(4), pages 501-523.
  • Handle: RePEc:taf:jitecd:v:17:y:2008:i:4:p:501-523
    DOI: 10.1080/09638190802250027
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    Citations

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    Cited by:

    1. Robert C. Feenstra & Hong Ma, 2014. "Trade Facilitation and the Extensive Margin of Exports," The Japanese Economic Review, Japanese Economic Association, vol. 65(2), pages 158-177, June.
    2. Hezekiah Agwara & Philip Auerswald & Brian Higginbotham, 2014. "Algorithms and the Changing Frontier," NBER Working Papers 20039, National Bureau of Economic Research, Inc.
    3. John C. Beghin & Miet Maertens & Johan Swinnen, 2017. "Nontariff Measures and Standards in Trade and Global Value Chains," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 2, pages 13-38 World Scientific Publishing Co. Pte. Ltd..
    4. Schuster, Monica & Maertens, Miet, 2015. "The Impact of Private Food Standards on Developing Countries’ Export Performance: An Analysis of Asparagus Firms in Peru," World Development, Elsevier, vol. 66(C), pages 208-221.
    5. 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.
    6. 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.
    7. Olga Timoshenko & Paulo Bastos & Daniel Dias, 2016. "Learning, Prices, and Firm Dynamics," Working Papers 2016-11, The George Washington University, Institute for International Economic Policy.
    8. Karine Latouche & Emmanuelle Chevassus-Lozza, 2015. "Retailer Supply Chain and Market Access: Evidence From French Agri-food Firms Certified with Private Standards," The World Economy, Wiley Blackwell, vol. 38(8), pages 1312-1334, August.
    9. Disdier, Anne-Célia & Gaigné, Carl & Herghelegiu, Cristina, 2016. "Firm Exports and Quality Standards: Evidence from French Food Industry," 149th Seminar, October 27-28, 2016, Rennes, France 244783, European Association of Agricultural Economists.
    10. Iacovone, Leonardo & Javorcik, Beata, 2012. "Getting Ready: Preparation for Exporting," CEPR Discussion Papers 8926, C.E.P.R. Discussion Papers.
    11. Jørgensen, Jan Guldager & Schröder, Philipp J.H., 2014. "Harmonization versus Mutual Recognition: Some pitfalls for the coordination of product standards under imperfect competition," Discussion Papers of Business and Economics 23/2014, University of Southern Denmark, Department of Business and Economics.
    12. repec:spr:empeco:v:54:y:2018:i:2:d:10.1007_s00181-016-1220-3 is not listed on IDEAS
    13. Rodrigue, Joel & Soumonni, Omolola, 2014. "Deforestation, foreign demand and export dynamics in Indonesia," Journal of International Economics, Elsevier, vol. 93(2), pages 316-338.
    14. Federico Bernini & Lucas Figal Garone & Alessandro Maffioli, 2017. "Certificación internacional de calidad: ¿Señalizando a quién?: Impacto en el desempeño de empresas en Argentina," IDB Publications (Working Papers) 97438, Inter-American Development Bank.
    15. Xiaohua Bao & Wei-Chih Chen, 2013. "The Impacts of Technical Barriers to Trade on Different Components of International Trade," Review of Development Economics, Wiley Blackwell, vol. 17(3), pages 447-460, August.
    16. Xiaohua Bao, 2014. "Special Issue: Issues in Asia. Guest Editor: Laixun Zhao," Review of Development Economics, Wiley Blackwell, vol. 18(2), pages 286-299, May.
    17. Stefan Borsky & Andrea Leiter & Michael Pfaffermayr, 2017. "Product Quality and Sustainability: The Effect of International Environmental Agreements on Bilateral Trade," Graz Economics Papers 2017-06, University of Graz, Department of Economics.
    18. Hezekiah Agwara & Philip Auerswald & Brian Higginbotham, 2013. "Algorithms and the Changing Frontier," NBER Chapters,in: The Changing Frontier: Rethinking Science and Innovation Policy, pages 371-410 National Bureau of Economic Research, Inc.
    19. Hu, Cui & Lin, Faqin & Tan, Yong & Tang, Yihong, 2017. "How Exporting Firms Respond to Technical Barriers to Trade?," MPRA Paper 80946, University Library of Munich, Germany.
    20. Salamat Ali, 2016. "Export Response to Sanitary and Phytosanitary Measures and Technical Barriers to Trade: Firm-level Evidence from a Developing Country," Discussion Papers 2016-02, University of Nottingham, CREDIT.
    21. Ederington,Josh & Ruta,Michele, 2016. "Non-tariff measures and the world trading system," Policy Research Working Paper Series 7661, The World Bank.

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