Stock price reaction on ISO 9001 certification announcement: evidence from Indonesia
International Journal of Quality & Reliability Management
ISSN: 0265-671X
Article publication date: 11 May 2021
Issue publication date: 25 January 2022
Abstract
Purpose
Certification information published by a company will be responded by the market. Therefore, the purpose of this study is to examine the impact of ISO 9001 certification on the stock market reaction as indicated by stock returns reaction of companies in Indonesia.
Design/methodology/approach
This study used event study method with the period of 13 days. It consists of 6 days before and after ISO 9001 certification announcement and 1 day at the time of the event. It analyzed by using pair sample t-test and one sample t-test. The stock return data is obtained from companies that are ISO 9001 certified and it tested for their stock reactions before and after the certification.
Findings
The results of empirical research showed that the average and companies cumulative abnormal returns in Indonesia react quickly and positively on the first day after ISO 9001 certification announcement. This study proved the differences between abnormal returns before and after the ISO 9001 certification announcement period.
Research limitations/implications
The company's success in implementing ISO 9001 will have an impact on investment in the capital market with a positive response from stock market players. The implication of this study is the further research can examine directly the impact of ISO 9001 implementation on investor behavior in the capital market.
Originality/value
Based on the development of the literature review, this is the first study which examined the impact of ISO 9001 certification announcement on investor reactions in the short term. Therefore, companies in Indonesia need to implement a quality management system for investors in Indonesia.
Keywords
Citation
Kiryanto, K., Kartika, I. and Zaenudin, Z. (2022), "Stock price reaction on ISO 9001 certification announcement: evidence from Indonesia", International Journal of Quality & Reliability Management, Vol. 39 No. 2, pp. 612-629. https://doi.org/10.1108/IJQRM-04-2020-0127
Publisher
:Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited