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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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    1. repec:eee:wdevel:v:97:y:2017:i:c:p:79-101 is not listed on IDEAS
    2. Goedhuys, Micheline & Sleuwaegen, Leo, 2016. "International standards certification, institutional voids and exports from developing country firms," International Business Review, Elsevier, pages 1344-1355.
    3. Prüfer, J.O., 2014. "Trusting Privacy in the Cloud," Discussion Paper 2014-047, Tilburg University, Tilburg Law and Economic Center.
    4. Tarasov, Alexander, 2012. "Per capita income, market access costs, and trade volumes," Journal of International Economics, Elsevier, pages 284-294.
    5. 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.
    6. Wolfe, Robert, 2013. "Letting the sun shine in at the WTO: How transparency brings the trading system to life," WTO Staff Working Papers ERSD-2013-03, World Trade Organization (WTO), Economic Research and Statistics Division.
    7. Victoria Golikova & Boris Kuznetsov, 2014. "Do Russian Firms Need ISO Certification for Exporting?," ERSA conference papers ersa14p1721, European Regional Science Association.
    8. 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).

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