The Researchers examine the impact of formal standards on trade in global value chains (GVCs) in Europe. Using a gravity model approach for panel data, they estimate the influence of national, European and international standards on trade in value-added and gross trade flows within Europe. They find that national standards on their own hamper trade in European value chains while European and international standards foster trade. European standards have greater influence on trade in inner-European value chains whereas international standards have positive effects on imports into Europe from third countries. European standards therefore reduce information asymmetries between market actors in the value chains of the European Single Market. International standards serve as a means of global communication between international trade partners. In addition, they find a positive effect of an interaction term between national and European standards in European value chains confirming the necessity of national standardization.
Authors: Knut Blind, Axel Mangelsdorf, Crispin Niebel, & Florian Ramel (November 2017)
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