Working Paper: CEPR ID: DP1584
Authors: Alessandra Casella
Abstract: Traditional analyses of standards in international trade identify standards as government regulations and investigate the potential for distortion of trade flows. In reality, however, private industry groups exercise critical influence on the determination of technical standards. The composition of these groups is affected by technology and market conditions, and in an integrated market the alliances of private firms are likely to cross national boundaries, generating harmonization ?from the bottom?. If standards are public goods whose ideal value differs across economic activities and across countries, economic integration should bring increased harmonization across countries and finer differentiation across products. Empirical evidence from the United States and the European Union, although mostly anecdotal, supports this prediction.
Keywords: standards; coalitions; market integration
JEL Codes: F12; F15; H41; K32; L16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Formation of private coalitions among firms (L14) | Harmonization of standards (L15) |
| Opening of markets (L17) | Engagement of domestic firms with foreign firms (F23) |
| Engagement of domestic firms with foreign firms (F23) | Modified coalitions (C71) |
| Modified coalitions (C71) | Harmonization of standards (L15) |
| Increased market integration (F15) | Diversified set of standards (L15) |
| Economic interactions between firms across different countries (F23) | Movement from isolated national standards to international coalitions (F53) |