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

  • Joseph A. Clougherty
  • Michal 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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18132.

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Date of creation: Jun 2012
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Publication status: published as International Standards and International Trade: Empirical Evidence from ISO 9000 Diffusion , Joseph A. Clougherty, Michał Grajek. in Standards, Patents and Innovations , Simcoe, Agrawal, and Graham. 2014
Handle: RePEc:nbr:nberwo:18132
Note: IO ITI PR
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