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Can a signal mitigate a dilemma? Quality management standards, corruption, and business ethics

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  • Ullah, Barkat
  • Wei, Zuobao
  • Zhu, Yicheng

Abstract

In this study, we employ theWorld Bank Enterprise Survey (WBES)data for 93,570 firms in 141 mostly developing countries to examine the signaling value of International Organization for Standardization (ISO) certification and the role corruption plays in the signaling value of ISO adoption. We also investigate whether ISO adoption reduces the magnitude of corruption activities in corrupt business environments. We find that ISO adoption can facilitate firm sales growth and the signaling value of ISO adoption increases as corruption at both firm and country levels increases. In corrupt business environments, ISO adoption has a moderating effect on corruption activities.

Suggested Citation

  • Ullah, Barkat & Wei, Zuobao & Zhu, Yicheng, 2023. "Can a signal mitigate a dilemma? Quality management standards, corruption, and business ethics," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 701-716.
    • Handle: RePEc:eee:reveco:v:86:y:2023:i:c:p:701-716
    DOI: 10.1016/j.iref.2023.03.042
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    More about this item

    Keywords

    Quality management standards; International organization for standardization (ISO); Corruption; Firm growth; Information asymmetry; Signaling;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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