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Diffusion of ISO 9000 Standards and International Trade

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  • Michal Grajek

Abstract

Investigating the link between ISO 9000 standards and bilateral exports, this paper contributes to the literature on standardization and international trade. A debate exists as to how ISO 9000 impacts trade. First, it has been argued that ISO 9000 is a "common language" that lowers information asymmetries between firms, thus allowing more efficient organization of inter-firm trade. Second, ISO 9000 has been criticized as a means of introducing market-entry barriers and a tariff on international trade. To assess the actual impact we estimate a gravity equation for bilateral exports incorporating ISO 9000 adoptions in each country as factors affecting bilateral trade barriers. Endogeneity issues are carefully addressed. To obtain additional insights, we separately estimate an ISO 9000 international diffusion equation. In general, our results support the "common language" hypothesis, i.e., the empirical tests find both domestic and foreign ISO 9000 adoptions to benefit bilateral exports. Moreover, we find evidence for a substitution effect, as ISO 9000 certified firms tend to trade with each other more than with uncertified firms. Consequently, the positive impact of these standards on trade is more pronounced among ISO 9000 abundant countries. ZUSAMMENFASSUNG - (Die Diffusion von ISO 9000 Normen und der Internationale Handel) Das vorliegende Papier ist ein Beitrag zur Literatur über den Zusammenhang zwischen der Standardisierung und dem internationalen Handel, untersucht anhand der Verbindung zwischen der ISO 9000 Normierung und bilateralen Exportumsätzen. Über die Auswirkung von ISO 9000 auf den internationalen Handel existiert eine rege Debatte. Einerseits wurde argumentiert, dass die ISO 9000 Normen eine "gemeinsame Sprache" bilden, die die Informationsasymmetrie zwischen Unternehmen mindert und dadurch einen effizienteren Handel zwischen ihnen gewährt. Andererseits wurde ISO 9000 kritisiert als ein Mittel zur Einführung eines Marktzugangshemmnisses und als eine Steuer auf den internationalen Handel. Um die tatsächliche Auswirkung zu beurteilen, schätzen wir eine Gravitätsgleichung für die bilateralen Exportumsätze, die die nationalen Einführungszahlen von ISO 9000 als Determinanten der beidseitigen Handelshemmnisse berücksichtigt. Die Endogenitätsproblematik wird sorgfältig behandelt. Um zusätzliche Einsichten zu gewinnen, schätzen wir getrennt eine Gleichung der weltweiten Diffusion von ISO 9000. Unsere Ergebnisse bestätigen im Allgemeinen die Hypothese der "gemeinsamen Sprache", d.h. die empirischen Überprüfungen stellen fest, dass sich die inländischen sowie auch die ausländischen Einführungszahlen dieser Normen positiv auf die Exportumsätze der Handelspartner auswirken. Außerdem finden wir Anzeichen eines Substitutionseffektes, da die mit ISO 9000 zertifizierten Unternehmen zu mehr Handel mit anderen zertifizierten Unternehmen neigen als mit nicht zertifizierten Unternehmen. Folglich ist die positive Auswirkung der ISO 9000 Normierung auf den Handel zwischen den Ländern mit einer hohen Normierungsquote stärker ausgeprägt.

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  • Michal Grajek, 2004. "Diffusion of ISO 9000 Standards and International Trade," CIG Working Papers SP II 2004-16, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    • Handle: RePEc:wzb:wzebiv:spii2004-16
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    Cited by:

    1. J. Luis Guasch & Jean-Louis Racine & Isabel Sánchez & Makhtar Diop, 2007. "Quality Systems and Standards for a Competitive Edge," World Bank Publications - Books, The World Bank Group, number 6768.
    2. 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;Academy of International Business, vol. 39(4), pages 613-633, June.
    3. Boys, Kathryn A. & Grant, Jason H., 2010. "Iso 14000 Standards: Voluntary Environmental Governance As A Trade Facilitation Strategy?," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61855, Agricultural and Applied Economics Association.
    4. Helble, Matthias & Majoe, Adam, 2020. "Can Environmental Regulations Drive International Trade? Lessons for Asia from the European Union’s Performance of Buildings Directive," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 35(1), pages 69-90.
    5. Orefice, Gianluca & Piermartini, Roberta & Rocha, Nadia, 2012. "Harmonization and mutual recognition: What are the effects on trade?," Conference papers 332285, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Iñaki Heras-Saizarbitoria & Germán Arana & Ernesto Cilleruelo, 2013. "Adoption of ISO 9000 management standard in EU's transition economies: the case of the Baltic states," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 14(3), pages 481-499, June.
    7. Prosper F. BANGWAYO-SKEETE & Winston R. MOORE, 2015. "Entry Into Export Markets And Quality Certifications: Evidence From Developing Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 15(2), pages 17-34.
    8. Ederington,Josh & Ruta,Michele, 2016. "Non-tariff measures and the world trading system," Policy Research Working Paper Series 7661, The World Bank.
    9. Pascha, Werner & Storz, Cornelia, 2008. "How are markets created? The case of Japan's silver market," Working Papers on East Asian Studies 78/2008, University of Duisburg-Essen, Institute of East Asian Studies IN-EAST.
    10. Boys, Kathryn A. & Grant, Jason H., 2009. "ISO 9000 Standards: Implicit Barrier or Trade Facilitation Strategy?," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49525, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Gravity Model; International Trade; ISO 9000; Adoption of Standards; Network Effects; CompatibilityFlexibility.;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • F15 - International Economics - - Trade - - - Economic Integration

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