International Standards and Trade - A Review of the Empirical Literature
ISO R&I Team Summary
This paper reviews empirical studies that have investigated how international standards impact trade. It looks at different kinds of studies, from econometric studies to studies based on surveys of exporting firms. It concludes that the available literature does not provide a single answer to the question of trade effects - these effects seem to be context specific. To gain a deeper understanding of the relationship between standards and trade, future research will need to open up the 'black box' connecting standards to trade performance. That is, untangle the complex of relationships and linkages through which standards impact the economy.
While there is a large literature on the economic theory of international standards, and their presumed effects, we know much less about how international standards work in practice. This paper reviews the body of empirical work that has investigated the specific question: How international standards impact on international trade? Do they help or hinder trade? The work reviewed ranges from econometric studies using a variety of measures of standards derived from e.g. the Perinorm database, diffusion of ISO9000, regional agreements, mutual recognition agreements and harmonisation, to surveys of exporting firms. A mapping of the findings from econometric models shows that there is often, but not always, a positive relationship between international standards and exports or imports, which is in line with the widely held view that international standards are supportive of trade. For national (i.e. country-specific) standards studies find positive as well as negative effects on trade and thus provide only qualified support for the commonly held view that national standards create barriers to trade. Overall, the literature reviewed does not provide a single answer to the question of trade effects, and the explanation for this appears to have to do with how the multiple economic effects of standards interact. The paper summarises some of the existing empirical evidence for some of these effects, which include network externalities, variety, knowledge, quality and trust, and which merit further research in order to understand when standards help trade, and when not.
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- Institutional publication
- Peter Swann