Macroeconomic Causes and Effects of Formal Service Standardization

Paul Wakke

7/02/2014
(Original Publish Date: 4/24/2012)

The paper aims at providing a sound understanding of the growing significance of service standardization at national standards bodies. Service standards arose mainly in the last years, so that former studies dealing with causes and effects of standardization focused on product standards or did not examine service standardization separately. Therefore, this paper embodies an exploratory, descriptive approach to explicitly discover the macroeconomic causes and effects of service standardization. The analysis uses panel data from 15 national standards bodies over 13 years. Four factors related to service standardization were derived from the literature: industry size, deregulation, innovation, and foreign trade in services. Impulse response analyses based upon panel vector autoregression were conducted in order to examine the proposed relations and to detect possible causality. In summary, service standardization is positively related to all factors. More detailed, service standardization is caused by the industry size as well as deregulation, while service standards positively affect the industry size, foreign trade, and innovation activities within the service industries. The results give rise to the assumption that the economics of service standards have not yet been fully exploited and that further growth in the significance of service standardization is to be expected.