International standards for exporting firms: Evidence from China

Abstract

The existing literature provides mixed evidence of the impact of ISO 9000 international standards on country level export growth. Since it is costly to adopt the international standards, it is important to understand how these standards increase exports at the firm level. This paper examines the effect of ISO 9000 standards on firm-level export growth in China, which of all countries has the highest number of firms adopting ISO 9000 standards. With the assortative matching methodology, we first examine the factors related to the choice of applying for the certification. After controlling for this endogeneity issue, our results show that obtaining ISO 9000 standards significantly increases firm exports. Furthermore, we find low-tech firms and non-state-owned enterprises are more likely to benefit from adopting the standards. Overall, our study provides important guidelines for firms applying for the international quality standards.