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Unlocking Global Markets: The Impact of International Standards Certification on Pakistani Firms' Export Performance

Author

Listed:
  • Wadho, Waqar
  • Chaudhry, Azam

Abstract

We estimate the impact of international standards certification on the export performance of firms in a developing economy using a unique panel data from Pakistan's textile and apparel sector. To address endogeneity, we implement a novel instrumental variable strategy that leverages the prevalence of certified non-rival firms within the same district as an exogenous source of variation in certification adoption. We find that certification significantly increases the likelihood of exporting by 44 percentage points, raises export volumes by nearly ten times, and boosts annual export growth by 68 percent. We, then, explore the underlying mechanisms and find that certification facilitates product diversification, enhances knowledge networks, promotes both product and process innovation, and yields significant gains in labor productivity. However, certification does not lead to greater product complexity, suggesting that while it results in horizontal expansion and strengthens external linkages, it is not sufficient for vertical upgrading.

Suggested Citation

  • Wadho, Waqar & Chaudhry, Azam, 2025. "Unlocking Global Markets: The Impact of International Standards Certification on Pakistani Firms' Export Performance," GLO Discussion Paper Series 1611, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1611
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    File URL: https://www.econstor.eu/bitstream/10419/318197/1/GLO-DP-1611.pdf
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    More about this item

    Keywords

    ISO; standards certification; export; technological innovation; productivity;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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