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The Financial Impact of a Withdrawn ISO 9001 Certificate

Author

Listed:
  • Carlos Cândido

    (Faculty of Economics, University of Algarve and CEFAGE, Portugal)

  • Luis M.S. Coelho

    (Faculty of Economics, University of Algarve and CEFAGE, Portugal)

  • Ruben Peixinho

    (Faculty of Economics, University of Algarve and CEFAGE, Portugal)

Abstract

Purpose – The purpose of this paper is to assess to what extent the loss of the ISO 9001 certification affects the decertified firms’ financial performance. Design/methodology/approach – Using standard event-study methods, this paper matches a sample of 143 Portuguese companies that lost their ISO 9001 certification with similar non-event counterpart firms (according to return-on-assets and size) and compares the performance of these two groups of firms using financial data collected from the AMADEUS database. Findings – Results show no statistical significant differences in the financial performance (as measured by return-on-assets, return-on-sales, and sales growth) between companies that lost their ISO 9001 certification and their matched firms. Although the literature suggests that certification improves firms’ performance and that the benefits of certification may last over long periods of time, this paper’s results suggest that, after decertification, companies do not exhibit over or underperformance in their operations vis-à-vis comparable firms that do not undergo the same event. Originality/value – As far as the authors are aware, this is the first study assessing the impact of ISO 9001 certificate withdrawal on the decertified firms’ financial performance.

Suggested Citation

  • Carlos Cândido & Luis M.S. Coelho & Ruben Peixinho, 2016. "The Financial Impact of a Withdrawn ISO 9001 Certificate," CEFAGE-UE Working Papers 2016_01, University of Evora, CEFAGE-UE (Portugal).
    • Handle: RePEc:cfe:wpcefa:2016_01
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    References listed on IDEAS

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    Cited by:

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    2. Ferreira, Luís M.F.R. & Cândido, Carlos J.F., 2021. "Factors influencing firm propensity for ISO 9001 withdrawal: Evidence on decertification tendency and antecedents," International Journal of Production Economics, Elsevier, vol. 233(C).
    3. Clougherty, Joseph A. & Grajek, Michał, 2023. "Decertification in quality-management standards by incrementally and radically innovative organizations," Research Policy, Elsevier, vol. 52(1).
    4. Hernandez-Vivanco, Alfonso & Bernardo, Merce, 2023. "Management systems and productive efficiency along the certification life-cycle," International Journal of Production Economics, Elsevier, vol. 266(C).
    5. Hammad Riaz & Abubakr Saeed, 2020. "Impact of environmental policy on firm's market performance: The case of ISO 14001," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 681-693, March.
    6. Ionut Viorel Herghiligiu & Ioan-Bogdan Robu & Marius Pislaru & Adrian Vilcu & Anca Laura Asandului & Silvia Avasilcăi & Catalin Balan, 2019. "Sustainable Environmental Management System Integration and Business Performance: A Balance Assessment Approach Using Fuzzy Logic," Sustainability, MDPI, vol. 11(19), pages 1-30, September.
    7. Irene Marcuzzi & Matteo Podrecca & Marco Sartor & Guido Nassimbeni, 2023. "Out of social accountability: Reasons and alternative paths for SA8000 decertification," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 3140-3158, November.
    8. Hernandez-Vivanco, Alfonso & Domingues, Pedro & Sampaio, Paulo & Bernardo, Merce & Cruz-Cázares, Claudio, 2019. "Do multiple certifications leverage firm performance? A dynamic approach," International Journal of Production Economics, Elsevier, vol. 218(C), pages 386-399.
    9. Renáta Cződörová & Jozef Gnap, 2023. "Investigation of the Effectiveness of the Introduction of the Quality Management System According to the ISO 9001 Standard in Transport Companies: Slovakia Case Study," Sustainability, MDPI, vol. 15(3), pages 1-16, January.
    10. Hammad Riaz & Abubakr Saeed & Muhammad Saad Baloch & Nasrullah & Zeeshan Ahmad Khan, 2019. "Valuation of Environmental Management Standard ISO 14001: Evidence from an Emerging Market," JRFM, MDPI, vol. 12(1), pages 1-14, January.

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    More about this item

    Keywords

    ISO 9000; ISO 9001; certificate withdrawal; loss of certificate; decertification; financial impact; event study.;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • M19 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Other

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