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Do external quality certifications improve firms’ conduct? International evidence from manufacturing and service industries

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  • Goel, Rajeev K.
  • Nelson, Michael A.

Abstract

Empirically adding to the structure-conduct-performance paradigm, this paper uses firm-level survey data across more than 100 countries to examine the influence of external certifications on the behavior or conduct of firms. We consider two dimensions of firms’ conduct – R&D (research and development) spending and licensing of foreign technologies while accounting for a host of firm-specific factors (e.g., firms’ age, ownership structure, size). The extant literature has mainly focused on the influence of certifications on firms’ performance and generally considered single nations or a modest set of nations. Our results show external certification to positively affect conduct, whether conduct is measured by R&D or foreign technology licensing. The results are robust when broader external audits are considered. Manufacturing and service industries show qualitatively similar patterns, albeit the magnitudes of impacts differ. Older firms show some different attitudes towards R&D versus licensing, whereas the effects of larger size are consistently positive. Finally, firms located in the main business cities exhibit greater propensities to perform R&D and license foreign technologies, ceteris paribus.

Suggested Citation

  • Goel, Rajeev K. & Nelson, Michael A., 2020. "Do external quality certifications improve firms’ conduct? International evidence from manufacturing and service industries," The Quarterly Review of Economics and Finance, Elsevier, vol. 76(C), pages 97-104.
    • Handle: RePEc:eee:quaeco:v:76:y:2020:i:c:p:97-104
    DOI: 10.1016/j.qref.2019.03.006
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    References listed on IDEAS

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    Cited by:

    1. Jiaming Jiang & Rajeev K. Goel & Xingyuan Zhang, 2020. "IPR policies and determinants of membership in Standard Setting Organizations: a social network analysis," Netnomics, Springer, vol. 21(1), pages 129-154, December.

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    More about this item

    Keywords

    Quality certification; Audit; R&D; Foreign technology licensing; Manufacturing industries; Service industries;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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