Driving Factors for Service Companies to Participate in Formal Standardization Processes: An Empirical Analysis

Axel Mangelsdorf
  • Speaker
Faculty of Economics and Management, Technical University Berlin, Technical University Berlin

Event Information

Research Seminar
Business Processes
Mon. 17 Nov. 2008
12:00-13:00 hours
Mandeville Building T10-67


In developed and developing countries, the condition for economic success depends on the proper functioning of the national innovation system. Although the generation of innovations is an essential prerequisite for the proper functioning of innovation systems, only the broad diffusion of new technologies and practices supports the expansion of the knowledge into the economy. The national, regional and international standards development organizations (SDOs) produce standards contributing to the wide diffusion of the knowledge of new technologies and best practices. Against this background, the objective of this paper is to develop theoretical hypotheses concerning the driving factors of service companies to participate in formal SDOs at the national, regional and international level, and test them with the help of multivariate qualitative response (QR) models based on a sample of German service companies. The results of the QR models are used as foundation for the policy conclusions addressed to the relevant players, which include national SDOs, trade associations and service companies. As for the hypotheses of service companies to join standards development processes, it is expected that firms need a certain absorptive capacity in order to internalize the generated knowledge of the standardization process and to afford the costs that are associated with participation in standard development committees. To this end, larger service companies and companies with internal R&D activities are more likely to participate in SDOs. Moreover, it is also expected that service companies with activities on international markets are more likely to join standards development activities. These companies are likely to develop international standards in order to avoid compliance costs that are associated with idiosyncratic national standards. Companies with successful service innovations are expected to show a higher demand to develop service standards because they will use the standardization process in order to advertise their services to the market. Concerning the empirical analysis, a serial of QR models have been applied to the microeconomic data of German service companies. The estimation results could confirm the ex ante set up hypotheses. Larger firms and firms with internal R&D activities are more likely to participate in service standardization processes, indicating that firms need a certain absorptive capacity. The former result represents a challenge for policy makers since service standards might be biased towards larger companies, introducing additional compliance costs for smaller companies. The latter result suggests that firms with no or few internal R&D activities can benefit from spillover effects during the standardization process. In addition, firms with successful service innovations are also more likely to join standardization processes, indicating that service standardization can be regarded as a channel for knowledge transfer. Since firms with activities on international markets are also more likely to participate in SDOs, the hypothesis that service companies use the standardization process to open up markets can be confirmed.
Contact information:
Dr.ir. H.J. de Vries
Henk de Vries
Associate Professor of Standardisation
  • Coordinator