ISO 9000: New form of protectionism or common language in international trade?
International standards have the potential to both promote and hinder international trade. Yet empirical scholarship on the standards-trade relationship has been held up due to some methodological challenges: measurement problems, varied effects, and endogeneity concerns. We are able to surmount these challenges while considering the impact of one particular standard on the country-pair trade flows between 91 nations over the 1995-2005 period. To deal with these challenges, we measure the degree of standardization via the penetration of ISO 9000 in individual nations, allow ISO diffusion to manifest via multiple (quality-signaling, information/compliance-cost, and common-language) effects, and use instrumental variable and panel data techniques to overcome endogeneity concerns. We find strong evidence in support of ISO 9000 involving a common-language effect that enhances country-pair trade; yet, the evidence is more mixed with regard to the quality-signaling and information/compliance-cost effects. While we find ISO-rich nations (most notably European) to clearly benefit from the worldwide diffusion of standardization, ISO 9000 represents a de facto trade barrier for nations (e.g., the US and Mexico) lagging behind in terms of adoption.
|Date of creation:||15 Sep 2009|
|Date of revision:|
|Publication status:||Published in International Journal of Industrial Organization 36(5):70-82|
|Contact details of provider:|| Postal: |
Phone: +49 (0)30 21231 0
Fax: +49 (0)30 21231 9
Web page: http://www.esmt.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gasiorek, Michael & Smith, Alasdair & Venables, Anthony J, 1992. "`1992': Trade and Welfare; A General Equilibrium Model," CEPR Discussion Papers 672, C.E.P.R. Discussion Papers.
- Preeg, Ernest H., 1998. "From Here to Free Trade," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226679624.
- Gandal, Neil & Shy, Oz, 2001.
"Standardization policy and international trade,"
Journal of International Economics,
Elsevier, vol. 53(2), pages 363-383, April.
- Joseph A. Clougherty & Michal Grajek, 2006.
"The Impact of ISO 9000 Diffusion on Trade and FDI: A New Institutional Analysis,"
CIG Working Papers
SP II 2006-22, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Joseph A Clougherty & Michał Grajek, 2008. "The impact of ISO 9000 diffusion on trade and FDI: A new institutional analysis," Journal of International Business Studies, Palgrave Macmillan, vol. 39(4), pages 613-633, June.
- Clougherty, Joseph A. & Grajek, Michal, 2006. "The Impact of ISO 9000 Diffusion on Trade and FDI: A New Institutional Analysis," CEPR Discussion Papers 6026, C.E.P.R. Discussion Papers.
- Clougherty, Joseph A. & Grajek, Michal, 2006. "The Impact of ISO 9000 Diffusion on Trade and FDI: A New Institutional Analysis," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 179, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Knut Blind, 2004. "The Economics of Standards," Books, Edward Elgar, number 3392, 6.
- Harrigan, James, 1993. "OECD imports and trade barriers in 1983," Journal of International Economics, Elsevier, vol. 35(1-2), pages 91-111, August.
- Benezech, Daniele & Lambert, Gilles & Lanoux, Blandine & Lerch, Christophe & Loos-Baroin, Jocelyne, 2001. "Completion of knowledge codification: an illustration through the ISO 9000 standards implementation process," Research Policy, Elsevier, vol. 30(9), pages 1395-1407, December.
- Terlaak, Ann & King, Andrew A., 2006. "The effect of certification with the ISO 9000 Quality Management Standard: A signaling approach," Journal of Economic Behavior & Organization, Elsevier, vol. 60(4), pages 579-602, August.
- Rose, Andrew K, 2002.
"Do We Really Know that the WTO Increases Trade?,"
CEPR Discussion Papers
3538, C.E.P.R. Discussion Papers.
- Scott L. Baier & Jeffrey H. Bergstrand, 2005.
"Do free trade agreements actually increase members’ international trade?,"
2005-03, Federal Reserve Bank of Atlanta.
- Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
- Maskus, Keith E. & Otsuki, Tsunehiro & Wilson, John S., 2005. "The cost of compliance with product standards for firms in developing countries: an econometric study," Policy Research Working Paper Series 3590, The World Bank.
- James E. Anderson & Douglas Marcouiller, 2002.
"Insecurity And The Pattern Of Trade: An Empirical Investigation,"
The Review of Economics and Statistics,
MIT Press, vol. 84(2), pages 342-352, May.
- James E. Anderson & Douglas Marcouiller, S.J., 1999. "Insecurity and the Pattern of Trade: An Empirical Investigation," Boston College Working Papers in Economics 418, Boston College Department of Economics, revised 03 Aug 2000.
- Mark Vancauteren & Daniel Weiserbs, 2011.
"Intra-European Trade of Manufacturing Goods: An Extension of the Gravity Model,"
International Econometric Review (IER),
Econometric Research Association, vol. 3(1), pages 1-24, April.
- Marc VANCAUTEREN & Daniel WEISERBS, 2005. "Intra-European Trade of Manufacturing Goods : An extension of the Gravity Model," Discussion Papers (ECON - Département des Sciences Economiques) 2005026, Université catholique de Louvain, Département des Sciences Economiques.
- James E. Rauch, 1996.
"Networks versus Markets in International Trade,"
NBER Working Papers
5617, National Bureau of Economic Research, Inc.
- Paul Brenton & John Sheehy & Marc Vancauteren, 2001. "Technical Barriers to Trade in the European Union: Importance for Accession Countries," Journal of Common Market Studies, Wiley Blackwell, vol. 39(2), pages 265-284, 06.
- Ganslandt, Mattias & Markusen, James R., 2001. "National Standards and International Trade," Working Paper Series 547, Research Institute of Industrial Economics.
- Barrett, Christopher B. & Yang, Yi-Nung, 1998.
"Rational Incompatibility With International Product Standards,"
Economics Research Institute, ERI Study Papers
28342, Utah State University, Economics Department.
- Barrett, Christopher B. & Yang, Yi-Nung, 2001. "Rational incompatibility with international product standards," Journal of International Economics, Elsevier, vol. 54(1), pages 171-191, June.
- Barrett, Christopher B. & Yang, Yi-Nung, 1999. "Rational Incompatibility With International Product Standards," Working Papers 14597, International Agricultural Trade Research Consortium.
- Boom, Anette, 1995. "Asymmetric International Minimum Quality Standards and Vertical Differentiation," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 101-19, March.
- Freund, Caroline L. & Weinhold, Diana, 2004. "The effect of the Internet on international trade," Journal of International Economics, Elsevier, vol. 62(1), pages 171-189, January.
- Matutes, Carmen & Regibeau, Pierre, 1996. "A selective review of the economics of standardization. Entry deterrence, technological progress and international competition," European Journal of Political Economy, Elsevier, vol. 12(2), pages 183-209, September.
- Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-60, February.
- Swann, Peter & Temple, Paul & Shurmer, Mark, 1996. "Standards and Trade Performance: The UK Experience," Economic Journal, Royal Economic Society, vol. 106(438), pages 1297-1313, September.
- Maskus, Keith E. & Wilson, John S. & Tsunehiro Otsuki, 2000. "Quantifying the impact of technical barriers to trade : a framework for analysis," Policy Research Working Paper Series 2512, The World Bank.
- Hummels, David & Levinsohn, James, 1995.
"Monopolistic Competition and International Trade: Reconsidering the Evidence,"
The Quarterly Journal of Economics,
MIT Press, vol. 110(3), pages 799-836, August.
- David Hummels & James Levinsohn, 1993. "Monopolistic Competition and International Trade: Reconsidering the Evidence," NBER Working Papers 4389, National Bureau of Economic Research, Inc.
- Hummels, D. & Levinsohn, J., 1993. "Monopolistic Competition and International Trade: Reconsidering the Evidence," Working Papers 339, Research Seminar in International Economics, University of Michigan.
- Baldwin, Richard, 2000. "Regulatory Protectionism, Developing Nations and a Two-Tier World Trade System," CEPR Discussion Papers 2574, C.E.P.R. Discussion Papers.
- Knut Blind, 2002. "Driving forces for standardization at standardization development organizations," Applied Economics, Taylor & Francis Journals, vol. 34(16), pages 1985-1998.
When requesting a correction, please mention this item's handle: RePEc:esm:wpaper:esmt-09-006. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ESMT Faculty Publications)
If references are entirely missing, you can add them using this form.