Product standards and export quality: Micro evidence from China

- This paper studies whether the product standards improve the product quality.
- China's transaction level data from customs are used for investigation.
- We exploit EU's policy on lighter's standard as a natural experiment.
- Triple difference method is adopted for identification.
- The results reveal that lighter standards lift export quality of China's lighters to EU.

Using European Union's decision on lighters on 11 May 2006 that only lighters which are child-resistant are placed on the market as a natural experiment, this paper firstly examines the impact of product standards on export quality causally. We use China's HS-8 digit product level trade data and triple difference approach to analyze whether the product standards causally improve the product quality. We get the answer yes.