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Impact of ISO 9000 certification on firm performance: evidence from Brazil

Author

Listed:
  • Francisco Starke
  • Rangamohan V. Eunni
  • Nuno Manoel Martins Dias Fouto
  • Claudio Felisoni de Angelo

Abstract

Purpose - The purpose of this paper is to investigate the impact of ISO 9000 certification on three dimensions of firm performance that are theoretically derived to have a relationship with the adoption of ISO 9000 standards, namely, sales revenue, cost of goods sold/sales revenue, and the asset turnover ratio (sales/total assets). Design/methodology/approach - Employing a panel data approach covering all publicly traded companies in Brazil that had adopted the ISO 9000 standards from 1995 to 2006, the authors investigate the impact of the certification on firm performance using three categories of economic regression models: the pooling of cutting data with ordinary least squares, the fixed effects and the random effects. Findings - ISO 9000 certification is found to be associated with an increase in sales revenues, decrease in cost of goods sold/sales revenue and increase in the asset turnover ratios of the certified firms. Research limitations/implications - The research findings suggest that companies large or small, irrespective of their capital structure (i.e. debt/equity) and cutting across industries will benefit from the adoption of ISO 9000 standards. However, the extent to which firms benefit from such adoption is likely to vary. Moreover, the generalizability of the research findings is limited by the size of the sample. Originality/value - The paper's chief contribution lies in the validation of the signaling theory in the context of business organizations and extending the domain of research on this topic to emerging markets generally.

Suggested Citation

  • Francisco Starke & Rangamohan V. Eunni & Nuno Manoel Martins Dias Fouto & Claudio Felisoni de Angelo, 2012. "Impact of ISO 9000 certification on firm performance: evidence from Brazil," Management Research Review, Emerald Group Publishing Limited, vol. 35(10), pages 974-997, September.
    • Handle: RePEc:eme:mrrpps:v:35:y:2012:i:10:p:974-997
    DOI: 10.1108/01409171211272697
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    Citations

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    Cited by:

    1. Gallego, Juan Miguel & Gutiérrez, Luis H., 2017. "Quality Management System and Firm Performance in an Emerging Economy: The Case of Colombian Manufacturing Industries," IDB Publications (Working Papers) 8260, Inter-American Development Bank.
    2. Štěpánka Hronová & Miroslav Špaček, 2021. "Sustainable HRM Practices in Corporate Reporting," Economies, MDPI, vol. 9(2), pages 1-34, May.
    3. Renáta Cződörová & Jozef Gnap, 2023. "Investigation of the Effectiveness of the Introduction of the Quality Management System According to the ISO 9001 Standard in Transport Companies: Slovakia Case Study," Sustainability, MDPI, vol. 15(3), pages 1-16, January.
    4. Blind, Knut & Mangelsdorf, Axel & Pohlisch, Jakob, 2018. "The effects of cooperation in accreditation on international trade: Empirical evidence on ISO 9000 certifications," International Journal of Production Economics, Elsevier, vol. 198(C), pages 50-59.
    5. Siougle, Efrosini & Dimelis, Sophia & Economidou, Claire, 2019. "Does ISO 9000 certification matter for firm performance? A group analysis of Greek listed companies," International Journal of Production Economics, Elsevier, vol. 209(C), pages 2-11.
    6. Adnan Gharaibeh, 2016. "The contribution of capital investment and selling expenses on sales revenue: An analytical study of Jordanian industrial corporations (2004-2014)," Journal of Social Sciences (COES&RJ-JSS), , vol. 5(4), pages 540-547, October.
    7. Ullah, Barkat & Wei, Zuobao & Xie, Feixue, 2014. "ISO certification, financial constraints, and firm performance in Latin American and Caribbean countries," Global Finance Journal, Elsevier, vol. 25(3), pages 203-228.
    8. Yu, Jie & Xiao, Shengsheng, 2023. "Project certification and screening in the reward-based crowdfunding market," Journal of Business Research, Elsevier, vol. 165(C).
    9. Jonathan Pryshlakivsky & Cory Searcy, 2017. "A Heuristic Model for Establishing Trade-Offs in Corporate Sustainability Performance Measurement Systems," Journal of Business Ethics, Springer, vol. 144(2), pages 323-342, August.
    10. Mihaela Iona?cu & Ion Iona?cu & Marian Sacarin & Mihaela Minu, 2017. "Exploring the Impact of ISO 9001, ISO 14001 and OHSAS 18001 Certification on Financial Performance: The Case of Companies listed on the Bucharest Stock Exchange," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 19(44), pages 166-166, February.
    11. Zhang, Jianhong & Jiang, Jiangang & Noorderhaven, Niels, 2019. "Is certification an effective legitimacy strategy for foreign firms in emerging markets?," International Business Review, Elsevier, vol. 28(2), pages 252-267.
    12. Sungida Rashid, 2021. "Do manufacturing firms in Bangladesh acquire ISO certificates to offset the handicap of credit constraints?," SN Business & Economics, Springer, vol. 1(1), pages 1-15, January.

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