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The Impacts of Alignment with Global Product Standards on Exports of Firms in Developing Countries

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  • Galina An
  • Keith E. Maskus

Abstract

Complying with global standards and technical norms can be costly, making them potential impediments to trade, but it can also expand export opportunities. Two policies available to governments are alignment of domestic technical regulations with international standards and entry into mutual recognition agreements (MRAs). We study the effects of such decisions on the volume of exports to developed markets by firms in developing countries, using data from a World Bank firm‐level survey of awareness of global product norms. Both standards alignment and MRAs are associated with more exports to developed countries, but only MRAs significantly promote exports. This finding is consistent with theoretical predictions that MRAs should reduce the fixed costs of exporting more than standards alignment, permitting more firms to enter export markets in higher volumes. Governments in developing countries hoping to encourage exports may wish to favour the negotiation of mutual recognition of testing and certification procedures with major trading partners as a more affirmative avenue to expanding international sales.

Suggested Citation

  • Galina An & Keith E. Maskus, 2009. "The Impacts of Alignment with Global Product Standards on Exports of Firms in Developing Countries," The World Economy, Wiley Blackwell, vol. 32(4), pages 552-574, April.
    • Handle: RePEc:bla:worlde:v:32:y:2009:i:4:p:552-574
    DOI: 10.1111/j.1467-9701.2008.01150.x
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    Cited by:

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    3. Suchita Srinivasan, 2017. "Driven up the wall? Role of environmental regulation in innovation along the automotive global value chain," CIES Research Paper series 52-2017, Centre for International Environmental Studies, The Graduate Institute.
    4. Golovan, Sergei & Volchkova, Natalya, 2022. "How costly is exporting? An empirical assessment of trade model with heterogeneous firms," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 68, pages 93-116.
    5. Drori, Netanel & Hashai, Niron & Clougherty, Joseph A., 2023. "Fire and ice: The incompatible impact of industry-wide domestic patents and international standards on firm internationalization," International Business Review, Elsevier, vol. 32(5).

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