Publication:
The Cost of Compliance with Product Standards for Firms in Developing Countries : An Econometric Study

Simple item page
dc.contributor.authorMaskus, Keith E.
dc.contributor.authorOtsuki, Tsunehiro
dc.contributor.authorWilson, John S.
dc.date.accessioned2012-06-25T18:27:50Z
dc.date.available2012-06-25T18:27:50Z
dc.date.issued2005-05
dc.description.abstractStandards and technical regulations exist to protect consumer safety or to achieve other goals, such as ensuring the interoperability of telecommunications systems, for example. Standards and technical regulations can, however, raise substantially both start-up and production costs for firms. Maskus, Otsuki, and Wilson develop econometric models to provide the first estimates of the incremental production costs for firms in developing nations in conforming to standards imposed by major importing countries. They use firm-level data generated from 16 developing countries in the World Bank Technical Barriers to Trade (TBT) Survey Database. Their findings indicate that standards do increase short-run production costs by requiring additional inputs of labor and capital. A 1 percent increase in investment to meet compliance costs in importing countries raises variable production costs by between 0.06 and 0.13 percent, a statistically significant increase. The authors also find that the fixed costs of compliance are nontrivial-approximately $425,000 per firm, or about 4.7 percent of value added on average. The results may be interpreted as one indication of the extent to which standards and technical regulations might constitute barriers to trade. While the relative impact on costs of compliance is relatively small, these costs can be decisive factors driving export success for companies. In this context, there is scope for considering that the costs associated with more limited exports to countries with import regulations may not conform to World Trade Organization rules encouraging harmonization of regulations to international standards, for example. Policy solutions then might be sought by identifying the extent to which subsidies or public support programs are needed to offset the cost disadvantage that arises from nonharmonized technical regulations.en
dc.identifierhttp://documents.worldbank.org/curated/en/2005/05/5800528/cost-compliance-product-standards-firms-developing-countries-econometric-study
dc.identifier.doi10.1596/1813-9450-3590
dc.identifier.urihttps://hdl.handle.net/10986/8961
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; No. 3590
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectBENCHMARK
dc.subjectBILATERAL TRADE
dc.subjectCAPITAL USE
dc.subjectCOMPETITIVENESS
dc.subjectCOMPLIANCE COSTS
dc.subjectCONSUMERS
dc.subjectCOST FUNCTIONS
dc.subjectCOST MINIMIZATION
dc.subjectDAMAGES
dc.subjectDEVELOPMENT INDICATORS
dc.subjectDISECONOMIES
dc.subjectDISECONOMIES OF SCALE
dc.subjectECONOMETRIC MODELS
dc.subjectECONOMIC DEVELOPMENT
dc.subjectECONOMIC REVIEW
dc.subjectECONOMIC THEORY
dc.subjectECONOMICS
dc.subjectECONOMIES OF SCALE
dc.subjectELASTICITIES
dc.subjectELASTICITY
dc.subjectEMISSION STANDARDS
dc.subjectEMPIRICAL EVIDENCE
dc.subjectEMPIRICAL STUDIES
dc.subjectEMPLOYMENT
dc.subjectEQUATIONS
dc.subjectEQUILIBRIUM
dc.subjectEXPENDITURES
dc.subjectEXPORTS
dc.subjectFACTOR DEMAND
dc.subjectFIXED COSTS
dc.subjectGDP
dc.subjectGDP DEFLATOR
dc.subjectGENERAL EQUILIBRIUM MODEL
dc.subjectGOVERNMENT REGULATIONS
dc.subjectIMPORTS
dc.subjectINFLATION
dc.subjectINPUT PRICES
dc.subjectINPUT USE
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectINTERMEDIATE INPUTS
dc.subjectINTERNATIONAL STANDARDS
dc.subjectINTERNATIONAL TRADE
dc.subjectLABOR COSTS
dc.subjectMARGINAL COST
dc.subjectMARKET FAILURES
dc.subjectMAXIMUM LIKELIHOOD ESTIMATION
dc.subjectMIDDLE EAST
dc.subjectPERMITS
dc.subjectPOLICY RESEARCH
dc.subjectPOLITICAL ECONOMY
dc.subjectPRODUCERS
dc.subjectPRODUCTION COSTS
dc.subjectPUBLIC POLICY
dc.subjectREGRESSION ANALYSIS
dc.subjectSPILLOVERS
dc.subjectSUB-SAHARAN AFRICA
dc.subjectTARIFF BARRIERS
dc.subjectTECHNICAL STANDARDS
dc.subjectTELECOMMUNICATIONS
dc.subjectTHEORETICAL MODELS
dc.subjectTRADE DISPUTES
dc.subjectTRANSACTION COSTS
dc.subjectTRANSPARENCY
dc.subjectVALUE ADDED
dc.subjectVARIABLE COSTS
dc.subjectVARIABLE INPUTS
dc.subjectWAGE RATES
dc.subjectWAGES
dc.subjectMicrodata Set
dc.titleThe Cost of Compliance with Product Standards for Firms in Developing Countries : An Econometric Studyen
dspace.entity.typePublication
okr.crossref.titleThe Cost Of Compliance With Product Standards For Firms In Developing Countries: An Econometric Study
okr.date.doiregistration2025-04-10T09:28:04.467541Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2005/05/5800528/cost-compliance-product-standards-firms-developing-countries-econometric-study
okr.globalpracticeEducation
okr.guid441521468330948472
okr.identifier.doi10.1596/1813-9450-3590
okr.identifier.externaldocumentum000090341_20050515133900
okr.identifier.internaldocumentum5800528
okr.identifier.reportWPS3590
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2005/05/15/000090341_20050515133900/Rendered/PDF/wps3590.pdfen
okr.relation.associateddatasethttp://microdata.worldbank.org/index.php/catalog/434
okr.topicEconomic Theory and Research
okr.topicEnvironmental Economics and Policies
okr.topicHealth Economics and Finance
okr.topicAdministrative and Regulatory Law
okr.topicScience Education
okr.topicEducation
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
Files
Original bundle
Now showing 1 - 2 of 2
Thumbnail Image
Name:
wps3590.pdf
Size:
290.26 KB
Format:
Adobe Portable Document Format
Download
No Thumbnail Available
Name:
wps3590.txt
Size:
72.93 KB
Format:
Plain Text
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Plain Text
Description:
Download
Collections
Policy Research Working Papers