Skip to main content
Article thumbnail
Location of Repository

International harmonization of product standards and firm heterogeneity in international trade

By Jose-Daniel Reyes


As free trade areas have proliferated and statutory tariffs have been dramatically reduced in recent decades, non-tariff barriers (NTBs) to international trade have risen in importance. Destination-specific product standards are one of the major types of NTBs as they impose additional costs on exporters and increase the time required to bring a product to market. This paper examines the response of U.S. manufacturing firms to a reduction of this NTB by looking at the harmonization of European product standards to international norms in the electronics sector. Using a highly detailed dataset that links U.S. international trade transactions to U.S. firms and a new industry-level database of EU product standards, the author finds that harmonization increases U.S. exports to the EU and that this increase is due to more U.S. firms entering the EU market –the extensive margin of trade. New entrants to the EU region are drawn mainly from the most productive set of firms already exporting to developing markets before harmonization -the extensive margin of trade composition. These firms are characterized by being smaller and less productive than the firms that were already exporting to the EU before harmonization. Furthermore, harmonization decreases export sales at existing exporters -the intensive margin of trade. These findings are consistent with a model featuring the role of product standards heterogeneity across market destinations and productivity heterogeneity across firms. These results suggest that working toward a harmonization of product rules across markets could be a supportive policy to encourage small and medium size firms'ability to enter new export markets.Markets and Market Access,E-Business,Information Security&Privacy,Economic Theory&Research,Labor Policies

OAI identifier:

Suggested articles


  1. (2005). 20World Trade Organization (WTO).
  2. (2010). Beyond the Information Technology Agreement: Harmonization of Standards and Trade in Electronics.",
  3. (2005). CE Marking, Product Standards and World Trade",
  4. (2008). Distorted Gravity: The Intensive and Extensive Margins of International Trade",
  5. (2008). Estimating Trade Flows: Trading Partners and Trading Volumes",
  6. (2003). Gravity with Gravitas: A solution to the Border Puzzle",
  7. (2009). Help or Hidrance? The Impact of Harmonized Standards on African Exports",
  8. (2009). Importers, Exporters and Multinationals: A Portrait of Firms in the U.S. that Trade Goods",
  9. (2004). Information Versus Product Adaptation: The Role of Standards in Trade",
  10. (2010). International Standards and Trade: A Review of the Empirical Literature, OECD Trade Policy Working Papers,
  11. (2010). International Standards and Trade: A Review of the Empirical Literature", OECD Trade Policy. Working Papers,
  12. (2008). Regionalism in Standards: Good or Bad for Trade?",
  13. (2010). The Economics of Standards: Theory, Evidence, Policy",
  14. (2006). The EU Standards Database: Overview and User Guide.", mimeo, available at
  15. (2006). The Good, the Bad, and the Ambiguous: Standards and Trade in Agricultural Products", Paper presented at the IATRC Summer Symposium,
  16. (2002). The Longitudinal Business Database", Working Papers,
  17. (2011). The Pro-Competitive Eect of International Harmonization of Product Standards.", mimeo. The World Bank.
  18. (2007). Trade Eects of Regional Standards Liberalization: A Heterogeneous Firms Approach", Policy Research Working Paper No. 4124, The World Bank.

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.