Motives to standardize: Empirical evidence from Germany

Knut Blind,Axel Mangelsdorf

doi:10.1016/j.technovation.2016.01.001

Abstract

In this paper, we identify the strategic motives of German manufacturing companies in the electrical engineering and machinery industry to be involved in standards development organizations. First, we present the general motives for the formation of strategic alliances and relate them to specific standardization motives. Then, we identify pursuing specific company interests, solving technical problems, knowledge seeking, influencing regulation, and facilitating market access as motives to standardize by means of factor analysis. In a second step, we test hypotheses on the relationship between the importance of strategic motives and firm level variables, e.g. R&D intensity, innovation activities, and firm size. The results reveal that firms in electric engineering and machinery have a particularly strong interest in ensuring industry-friendly design of regulations, which can be achieved by standards. Moreover, the results confirm that small firms also from these two sectors are active in standardization alliances to access knowledge from other involved stakeholders.

Highlights

Firms' involvement in standards setting alliances is attracting increasing attention within industry, among policy makers and researchers (Choi et al, 2011; European Commission, 2008)
We can confirm that R&D intensity has a positive impact on the knowledge seeking aspect, complemented by the fact that a firm's ability to use external knowledge from standardization alliances depends on its absorptive capacity
The knowledge seeking motive is followed by the ‘access to market’ motive, which means the opportunity of firms to open up and establish new markets through standardization, to achieve compatibility with complementary products, and to reduce barriers to trade in international markets

Summary

Introduction

Firms' involvement in standards setting alliances is attracting increasing attention within industry, among policy makers and researchers (Choi et al, 2011; European Commission, 2008). A firm participating in standards development organizations (SDOs) can increase its competitiveness by actively influencing standards towards its own preferred specializations or by passively gaining knowledge from the standardization process Our analysis identifies firms' specific strategic motives related to their involvement in standardization committees and their relation to companies' characteristics. In the European Union (EU), the introduction of the 'New Approach' to technical harmonization aims to establish a European Single Market by prescribing essential health and safety requirements in harmonized standards. International standards gain importance through Agreement on Technical Barriers to Trade of the World Trade Organization (WTO) (Büthe and Mattli, 2011; Mattli, 2001; Sykes, 1999)

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Conclusion