Unlocking Global Markets: The Impact of International Standards Certification on Pakistani Firms' Export Performance

Waqar Wadho and Azam Chaudhry

No 1611, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: We estimate the impact of international standards certification on the export performance of firms in a developing economy using a unique panel data from Pakistan's textile and apparel sector. To address endogeneity, we implement a novel instrumental variable strategy that leverages the prevalence of certified non-rival firms within the same district as an exogenous source of variation in certification adoption. We find that certification significantly increases the likelihood of exporting by 44 percentage points, raises export volumes by nearly ten times, and boosts annual export growth by 68 percent. We, then, explore the underlying mechanisms and find that certification facilitates product diversification, enhances knowledge networks, promotes both product and process innovation, and yields significant gains in labor productivity. However, certification does not lead to greater product complexity, suggesting that while it results in horizontal expansion and strengthens external linkages, it is not sufficient for vertical upgrading.

Keywords: ISO; standards certification; export; technological innovation; productivity (search for similar items in EconPapers)
JEL-codes: F14 J24 L14 L15 M21 O31 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-cse, nep-lma and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:glodps:1611

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