The effect of certification with the ISO 9000 Quality Management Standard: A signaling approach

Theory suggests that certification with a management standard may reduce information asymmetries in supply chains and thereby generate a competitive advantage for certified firms. This article uses an 11-year panel of U.S. manufacturing facilities to test whether certification with the ISO 9000 Quality Management Standard generates a competitive advantage. Results suggest that certified facilities grow faster after certification and that operational improvements do not account for this growth. Results also indicate that the growth effect is greater when buyers have greater difficulty acquiring information about suppliers.