Product Standards, Harmonization, and Trade: Evidence from the Extensive

I use a new database of EU product standards in the textiles, clothing, and footwear sectors to present the first empirical evidence that international standards harmoniza-tion is associated with increased partner country export variety. For an average low income country, the elasticity of export variety with respect to EU standards is-0.8 and the harmonization elasticity is 0.2, while for an average high income country the cor-responding figures are 0.4 and approximately zero. Standards and harmonization thus have the potential to exert an important impact on export variety growth in the develop-ing world. These results are robust to the use of alternative samples, and instrumental variables estimation. Simulations show that they are consistent with a heterogeneous firms model of trade in which harmonization is beneficial at the extensive margin pro-vided that any increases in compliance costs are not too large