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

  • Clougherty, Joseph A.
  • Grajek, Michal

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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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9047.

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Date of creation: Jul 2012
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Handle: RePEc:cpr:ceprdp:9047
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