ISO Certification, Financial Constraints, and Firm Performance in Latin American and Caribbean Countries

50 Pages Posted: 30 Jan 2015 Last revised: 19 Apr 2015

See all articles by Barkat Ullah

Barkat Ullah

Morgan State University

Zuobao Wei

University of Texas at El Paso

Feixue Xie

University of Texas at El Paso - College of Business Administration - Department of Economics and Finance

Date Written: October 15, 2014

Abstract

We employ World Bank Enterprise Survey data collected in 2006-2010 for 21,852 firms from 31 Latin American and Caribbean countries to investigate determinants of the adoption of International Organization for Standardization (ISO) certification, the relation between ISO certification and firm financial constraints, and the effect of ISO certification on firm performance. We find that ISO accreditation is positively related to firm size and firm age. Exporters and foreign firms are more likely to adopt ISO certification. We document that ISO-certified firms exhibit significantly lower level of financial constraints and higher labor productivity and lower cost of sales than non-certified firms.

Keywords: ISO certification, Financial constraint, Firm performance, International standard, Latin America, Caribbean countries

JEL Classification: G32, L15, L25

Suggested Citation

Ullah, Barkat and Wei, Zuobao and Xie, Feixue, ISO Certification, Financial Constraints, and Firm Performance in Latin American and Caribbean Countries (October 15, 2014). Global Finance Journal, Vol. 25, 2014, Available at SSRN: https://ssrn.com/abstract=2557156

Barkat Ullah (Contact Author)

Morgan State University ( email )

Baltimore, MD 21251
United States

Zuobao Wei

University of Texas at El Paso ( email )

500 W. University Ave.
El Paso, TX 79968
United States
915-747-5381 (Phone)
915-747-6282 (Fax)

Feixue Xie

University of Texas at El Paso - College of Business Administration - Department of Economics and Finance ( email )

500 W. University Ave.
El Paso, TX 79968
United States
915-747-7788 (Phone)
915-747-6268 (Fax)

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