Operating and Earnings Performance of Quality Certified Listed Firms

Abstract

With a large number of US firms, obtaining the ISO 9000 quality certification, this article attempts to investigate the impact of the certification on operating and financial performance. Our results indicate the benefits of the certification may be limited and may depend on the time period in consideration, and the sample of firms used for comparing firm performance. Also investors usually do not perceive the ISO certified firms to have a higher quality of earnings and not willing to pay more for earnings from such firms.

Keywords: ISO9000 quality certification, abnormal operating performance, and control firms

JEL Classification: G32, G33, G34