Access to Standards, Access to Markets: ISO Access, Quality Infrastructure, and International Trade

This paper studies whether access to the International Organization for Standardization (ISO) increases trade and through which margin. Using newly constructed ISO access data in a domestic-inclusive structural gravity framework for 185 trading partners from 1980 to 2016, the paper shows that ISO access increases international trade relative to domestic trade. Trade involving one ISO access country is about 63 percent higher than trade between countries without ISO access, while trade between two ISO access countries is about 95 percent higher. The effects are more visible for less developed countries and are stronger when the ISO access country is the exporter. Evidence on ISO certification uptake is consistent with an exporter-side standardization and certification-capacity channel. The paper identifies ISO access as an upstream quality infrastructure channel of trade. The findings imply that standardization and certification capacity can help countries overcome non-tariff barriers and upgrade exports.