Adoption of international standard certification in ASEAN: The roles of R&D, exports and competition

Abstract

This paper examines whether R&D, exports, and competition affect the adoption of international standard certification in ASEAN. Although prior studies recognized the importance of R&D, exports, and competition in determining a firm’s decision to adopt international standards, they often focused on a single determinant of this activity. Hence, this study tries to incorporate three important internal and external factors in a comprehensive study. The current study investigates these questions by analyzing the data from a valid sample of appropriately 4,000 firms in the manufacturing industries in eight countries in ASEAN in 2015-2016. The study utilizes a multilevel mixed-effects logit model for estimation to take into account the hierarchical nature of our data set. The results show that firms with R&D activities tend to adopt more international standard certificates. We also find that exports are highly important, while competition from the informal sector does not show association with firms’ innovativeness. These findings remain valid after endogenous and robustness testing using the propensity score matching method.