Abstract
Formal standards codify knowledge. Next to patents representing the generation of innovative knowledge, standards can hence be used to proxy the diffusion of innovative knowledge in macroeconomic growth models. Previous work mainly investigates the positive impact of in particular patents, but also standards on economic growth in short term, single country studies. This study is the first to examine the long-term effects of formal standards and patents on economic growth in a panel of eleven EU-15 countries between 1981 and 2014 using panel cointegration techniques. From policy makers' perspective standardization has also gained recently an increasing attention, e.g. in the call for the development of a European standardization strategy in the update of the industrial strategy. Our results show that European and international standards foster growth for the group of countries but that national standards have ambiguous growth effects in the panel. For patents, no significant effect on growth in this group of countries is identified.
Highlights
The endowment with capital, labor and technical progress are the main drivers of economic growth according to economic growth theory (Grossman & Helpman, 1994; Romer, 1990)
We focus our research on the long-term economic growth effects of voluntary standards as key component of the ‘tripartite standards regime’ (TSR) consisting of standards-setting, accreditation, and certification defined by Loconto and Busch (2010)
The tests allow for a different lag order for each panel that is chosen based on the Akaike Information Criterion (AIC)
Summary
The endowment with capital, labor and technical progress are the main drivers of economic growth according to economic growth theory (Grossman & Helpman, 1994; Romer, 1990). We focus our research on the long-term economic growth effects of voluntary standards as key component of the ‘tripartite standards regime’ (TSR) consisting of standards-setting, accreditation, and certification defined by Loconto and Busch (2010) These standards are collaboratively developed by industry experts, companies, governmental departments, academics, trade associations and consumer groups, representing a consensus on best practices. The results show that standards that are harmonized on the European and international level have a positive effect on long-term economic growth. These supranational standards help to connect the European production networks that build the main clusters of global value chains in times of globalization (Baldwin & Lopez-Gonzalez, 2015; Blind et al, 2018) and promote economic development.
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