The Effect Of ISO9001 Certification On Corporate Performance

Product quality is connected to our daily life.It is related to both every consumers and big suppliers.With the development of economy and globalization,international trade increase dramatically.The cost induced by differences between various companies and countries attracts the manufacturers attention.So the ISO institution builds the ISO9001 management system in order to set up a united and common management standard.China is one of the biggest economic entities,product quality should be emphasized when foreign companies enter Chinese market and Chinese corporations enter international markets.More and more companies begin to get ISO9001 certification voluntarily in order to expand orders,increase sales market and raise sales volume.Because customers focus more on product quality,companies must try to upgrade management system,improve product quality and enhance creativity to gain competitive edge.But it is not clear whether ISO9001 certification has effects on corporate performance,what kind of effects it has and what the mechanism is.Due to Chinese economic reform,the economy increase dramatically during the last four decades.Improved market and economic system are built,which provide a good opportunity for us to investigate the effect of ISO9001 certification on corporate performance.Because ISO9001 certification is a kind of voluntary certification,we regard it as a shock event and use PSM matching and DID methodology to investigate the impact of certification on ROA,cost and sales.Meanwhile,certification is a signal to the market and consumers,which shows companies' characteristics that are not easy to be identified and reduces information asymmetry.Thus,companies obtain benefits from certification.Because certification is a long-term process and should be changed every three years,I also distinguish long-term and short-term influence.What's more,certification is regarded as a strategy to enhance companies' competitiveness,so I research on the difference of certification timing.Last,I consider the effect of companies treats and market environment on the ISO certification.In this paper,I collect the certification data manually from the Certification and Accreditation Unified Business Information Search Platform and try to find out the relationship between ISO and companies' ROA,cost and sales separately.The data is about the published companies on A-share stock market from 2007 to 2014.It indicates that:The ISO9001 certification leads to an increase of ROA and has no effects on total costs.The larger the information asymmetry is in the market,the greater the benefits companies that have obtained certification get.The longer the companies get certification,the bigger the sales increase.The timing of certification has no effects on ROA,cost and sales in China.The dissertation uses empirical methods to investigate the effect of ISO9001 certification on corporate performance,which focuses on all industries rather than only on manufacturing.The results show that ISO9001 certification can improve product quality and provide more information to customers and investors.The research provides reference information on expand of international trade,choice of company strategies and acquisition of product information.