Article

Journal of International Business Studies (2008) 39, 613–633. doi:10.1057/palgrave.jibs.8400368

The impact of ISO 9000 diffusion on trade and FDI: A new institutional analysis

Joseph A Clougherty1,2 and Michal stroke Grajek3

  1. 1Wissenschaftszentrum Berlin (WZB), Germany
  2. 2CEPR, London, UK
  3. 3ESMT European School of Management and Technology, Berlin, Germany

Correspondence: JA Clougherty, Wissenschaftszentrum Berlin (WZB), Reichpietschufer 50, Berlin 10785, Germany. Tel: +49 30 25491 427; Fax: +49 30 25491 444; E-mail: clougherty@wzb.eu

Received 31 January 2006; Revised 14 November 2006; Accepted 31 August 2007; Published online 14 February 2008.

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Abstract

The effects of ISO 9000 diffusion on trade and foreign direct investment (FDI) have gone understudied. We employ panel data reported by OECD nations over the 1995–2002 period to estimate the impact of ISO adoptions on country-pair economic relations. We find ISO diffusion to have no effect in developed nations, but to positively pull FDI (i.e., enhancing inward FDI) and positively push trade (i.e., enhancing exports) in developing nations.

Keywords:

theory of FDI and the MNE, trade flows, transaction cost analysis, institutional environment

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