Openness to international markets and the diffusion of standards compliance in Latin America. A multi level analysis

Abstract

This study contributes to the debate on the role of openness to international markets for the diffusion of compliance with international standards in developing countries. Relying upon aggregated data for 1995–2005, as well as upon firm-level and secondary data from the Chilean salmon farming industry, the determinants of ISO 9000 and ISO 14001 diffusion at country, industry, and firm level, in Latin American are analysed. Our evidence suggests that openness to international markets acts at different levels. At both the country and industry level, it creates awareness and access to new knowledge therefore providing economic incentives or penalisations for evaluating certification. This effect competes and complements the deliberated efforts and policies in explaining diffusion of certification. At firm level, however, openness to international markets alone does not provide sufficient opportunities to acquire the knowledge required to comply with these standards. In this case, standards’ compliance depends on firm's capability to use relational and search assets, as well as on national and industrial efforts and policies to spread standards’ usage.