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Information asymmetries as trade barriers: ISO 9000 increases international commerce

Author

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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.

Suggested Citation

  • Matthew Potoski & Aseem Prakash, 2009. "Information asymmetries as trade barriers: ISO 9000 increases international commerce," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(2), pages 221-238.
    • Handle: RePEc:wly:jpamgt:v:28:y:2009:i:2:p:221-238
    DOI: 10.1002/pam.20424
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    References listed on IDEAS

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