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Accredited certification benefits

The reaction of the Portuguese stock market to ISO 9000 certification

The aims of the research in ‘The reaction of the Portuguese stock market to ISO 9000 certification’ (Beirao, G.,Cabral, 2002)are two-fold: to examine the stock market reaction to the announcement of certification and to evaluate the financial impact of certification. This research was based on a small survey of 12 Portuguese companies who were both certified and listed.

As is common with markets’ view of companies, the report suggeststhat the market positively anticipates the event (achievement ofISO 9000 certification)’, but concludes that ‘In spite of the small size of the sample, there is some evidence suggesting that the Portuguese stock market reacts positively to ISO 9000 certification’. The report states that the market value of a firm becoming certified has often already been anticipated in the market price. It goes on to add that ‘A favourable effect is also detected in achieving an early registration within the relevant sector or industry’.

Regarding the second aspect of the report, financial impact, the report states, ‘These results suggest that the ISO certification has a sound cost effect on companies, especially in the year following the certification, these costs are covered in the next year, showing a rise in operating performance and profitability’. It expands on this by saying, ‘The results suggest that ISO 9000 implementation and certification has costs, which are often high, but in the long-term the benefits outweigh the costs. This indicates that certification should be seen as a long-term investment. From an internal perspective, it takes time for organisations to capitalize fully on the benefits of a quality system and make it work to their best advantage. External factors, such as an increase in market share, require several years to become evident in the company’s accounting data’.

Paper available to purchase


  • Beirao, G., Cabral, J.A.S., (2002), ‘The reaction of the Portuguese stock market to ISO 9000 certification’, Total Quality Management, Vol. 13, No. 4, Iss. 9.

Porto University (Beirao, Cabral)