Product Standards and Firms’ Export Decisions
The paper estimates the effect of product standards on firms’ export decisions using two novel datasets. The first covers all exporting firms in 42 developing countries. The second covers pesticide standards for 243 agricultural and food products i...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/06/24657369/product-standards-firms’-export-decisions http://hdl.handle.net/10986/22202 |
| Summary: | The paper estimates the effect of
product standards on firms’ export decisions using two novel
datasets. The first covers all exporting firms in 42
developing countries. The second covers pesticide standards
for 243 agricultural and food products in 63 importing
countries over 2006–12. The analysis shows that product
standards significantly affect foreign market access. More
restrictive standards in the importing country, relative to
the exporting country, lower firms’ probability of exporting
as well as their export values and quantities. The relative
restrictiveness of standards also deters exporting firms
from entering new markets and leads to higher exit rates
from those markets. Moreover, firm characteristics mediate
the effect of product standards on firms’ export decisions.
Smaller exporters are more negatively affected in their
market entry and exit decisions by the relative stringency
of standards than larger exporters. Positive network effects
of exporters from the same country may help reduce the
burden of importing countries’ standards on firms’ decisions
to enter new markets. |
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