Competing for global standards: The political economy of international standard setting in high technology industries

Many powerful firms devote substantial resources to setting standards through political institutions despite a significant market presence internationally. What do these institutions offer firms that the marketplace does not when it comes to setting international product standards? More puzzling still, why do powerful globally oriented firms often pick narrow regional institutions to set standards when broad, global institutions are available? If business is becoming more globalized, international firms should choose to set standards as broadly as possible through global rather than regional institutions. What is it then that sub-global, regional institutions offer that global approaches do not? I argue that "when" and "where" firms choose to set standards depends on their relative competitive position and the political opportunities they have in available institutions. Using a focused comparison of 15 firms in four cases studies of standard setting in the telecommunications and consumer electronics industries, I am able to show that my structured firm preferences approach is better able to anticipate the standard setting strategies of firms than more traditional economic approaches which look solely at firm capabilities. In addition to explicating the political dimensions of an issue area normally discussed in purely economic terms, this study contributes to our understanding of the sources of "new protectionism" and provides a better understanding of the different forms of institutionalized cooperation in the international system.