The Financial Impact of ISO 9000 Certification in the US: An Empirical Analysis

‘The Financial Impact of ISO 9000 Certification in the US: An Empirical Analysis‘(Corbett, Montes-Sancho, Kirsch, 2004) ‘track(s) financial performance from 1987 to 1997 of all publicly traded ISO 9000 certified manufacturing firms in the United States with SIC codes 2000–3999, and test(s) whether ISO 9000 certification leads to productivity improvements, market benefits, and improved financial performance. We employ event-study methods, matching each certified firm to a control group of one or more non-certified firms in the same industry with similar pre-certification size and/or return on assets’.

The report concluded that ‘after deciding to seek their first ISO 9000 certification, publicly traded manufacturing firms in the US experience significant abnormal improvements in financial performance’. The report goes on to state ‘that the precise timing and magnitude of the effects vary across different control group specifications, but the longer-term effects are strongly significant in all cases’.

Much of this ground was also covered in the earlier report ‘Does ISO 9000 certification pay?‘ (Corbett, Montes, Kirsch and Alvarez-Gil, 2002) which strongly concluded that ‘certification does appear to lead to improved financial performance measured by return on assets’.

References

• Corbett, C.J., Montes-Sancho, M.J., Kirsch, D.A; (2004), The Financial Impact of ISO 9000 Certification in the US: An Empirical Analysis, Management Science; V. 51; No. 7; pp 1046-1059
• Corbett, C.J., Montes M.J., Kirsch, D.A., Alvarez-Gil, M.J., (2002), ‘Does ISO 9000 Certification Pay?’, Special Report, ISO Management Systems July – August 2002

UCLA Anderson School of Management (Corbett); Universidad Carlos III de Madrid (Montes-Sancho, Alvarez-Gil); Robert H Smith School of Business, University of Maryland (Kirsch)