Economic integration and diffusion of regulatory standards: Evidence from trade networks.

We document network effects in the diffusion of regulatory standards through international trade. Using both an instrumental variables approach, based on the time‐varying geographic component of trade, and a recentering approach, exploiting the timing of regulation adoption, we provide robust eviden...

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Bibliographic Details
Published in:Canadian Journal of Economics Vol. 59; no. 1; pp. 137 - 163
Main Authors: Rocha, Sergio H., Thakur, Prakrati
Format: Article
Published: Wiley-Blackwell Feb2026
Subjects:
Online Access:View this record in EBSCOhost
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      dt: Feb2026
      vid: 59
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      pub: Wiley-Blackwell
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        193836946
        10.1111/caje.70049
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      tig:
        atl: Economic integration and diffusion of regulatory standards: Evidence from trade networks.
      aug:
        au:
          Rocha, Sergio H.
          Thakur, Prakrati
        affil:
          Monash University
          Rensselaer Polytechnic Institute
      su:
        International economic integration
        International trade
        Legal compliance
        Intergovernmental cooperation
        Diffusion measurements
        Regulatory compliance
        Foreign trade regulation
        Instrumental variables (Statistics)
      sug:
        subj:
          International economic integration
          International trade
          Legal compliance
          Intergovernmental cooperation
          International Trade Financing
          Diffusion measurements
          Regulatory compliance
          Foreign trade regulation
          Instrumental variables (Statistics)
      ab: We document network effects in the diffusion of regulatory standards through international trade. Using both an instrumental variables approach, based on the time‐varying geographic component of trade, and a recentering approach, exploiting the timing of regulation adoption, we provide robust evidence that countries tend to domestically adopt the regulations of their key trade partners, especially when imposed by their export destinations. Leveraging the high dimensionality of our data, we show that the diffusion process is stronger for regulations and products with observable compliance. Our findings imply that economic integration can strengthen regulatory standards, aiding international policy coordination.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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