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Technical Entry Barriers and Economic Intergration: The Role of Industry Standards

Astri Muren ()

Homo Oeconomicus, 1997, vol. 14, 309-329

Abstract: National industry standards create entry barriers which lead to the segmentation of international markets. Depending on the size of the testing cost required to certify a product's compliance with the national standard, and on the discount factor, trade in a particular market will be affected in one of three ways: there may be no trade, there may be trade subject to the trader/producer paying the testing cost, or there may be trade in sub-standard quality. Harmonization of standards will reduce barriers and will thus lead to increase trade and lower product pricesá the given level of industry standards.

Date: 1997
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Handle: RePEc:hom:homoec:v:14:y:1997:p:309-329