International standards certification, institutional voids and exports from developing country firms
Micheline Goedhuys & Leo Sleuwaegen
#2016-021
This paper analyses the impact of International Standards Certification
(ISC) on the export participation and the scale of exports of firms
based in 89 developing or transition countries. We conceptualise ISC as
an endogenous institutional advantage, which bridges institutional voids
in the country and helps firms to export. The empirical results show
that certified firms are more likely to export, and to export on a
larger scale. The impact of ISC runs through two channels: productivity
and transaction cost economies. We show that certification plays an
important role in bringing down transaction costs in international
markets, while also maintaining and raising efficiency. This finding is
reinforced by additional evidence, suggesting that ISC matters more for
the export participation of domestic firms than for foreign firms and is
of greater importance for firms based in countries characterised by
severe institutional voids.
Keywords: certification, export performance, institutional voids,
transaction costs
JEL Classification: D23, D24, O12, O17, O33