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

Francisco Starke (FEA (School of Economics and Administration), Universidade de São Paulo, São Paulo, Brazil)
Rangamohan V. Eunni (Williamson College of Business Administration, Youngstown State University, Youngstown, Ohio, USA)
Nuno Manoel Martins Dias Fouto (FEA (School of Economics and Administration), Universidade de São Paulo, São Paulo, Brazil)
Claudio Felisoni de Angelo (FEA (School of Economics and Administration), Universidade de São Paulo, São Paulo, Brazil)

Management Research Review

ISSN: 2040-8269

Publication date: 7 September 2012

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.

Keywords

Citation

Starke, F., Eunni, R., Manoel Martins Dias Fouto, N. and Felisoni de Angelo, C. (2012), "Impact of ISO 9000 certification on firm performance: evidence from Brazil", Management Research Review, Vol. 35 No. 10, pp. 974-997. https://doi.org/10.1108/01409171211272697

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited

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