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International Standards and International Trade: Empirical Evidence from ISO 9000 Diffusion

In: Standards, Patents and Innovations

  • Joseph A. Clougherty
  • Michał Grajek

Empirical scholarship on the standards-trade relationship has been held up due to methodological challenges: measurement, varied effects, and endogeneity. Considering the trade-effects of one particular standard (ISO 9000), we surmount methodological challenges by measuring standardization via national penetration of ISO 9000, allowing standardization to manifest via multiple (quality-signaling, information/compliance-cost, and common-language) channels, and using instrumental variable, multilateral resistance and panel data techniques to overcome endogeneity. We find evidence of common-language and quality-signaling augmenting country-pair trade. Yet, ISO-rich nations (most notably European) benefit the most from standardization, while ISO-poor nations find ISO 9000 to represent a trade barrier due to compliance-cost effects.

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This chapter was published in:
  • Timothy Simcoe & Ajay K. Agrawal & Stuart Graham, 2014. "Standards, Patents and Innovations," NBER Books, National Bureau of Economic Research, Inc, number simc12-1, March.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 13209.
    Handle: RePEc:nbr:nberch:13209
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