Effect of a Management Intervention on Firm Performance and Quality Defects

Mahvish Faran and Karl Taylor

Economic Development and Cultural Change, 2025, vol. 73, issue 3, 1365 - 1408

Abstract: We use a novel firm-level dataset from a garments manufacturer in Pakistan to investigate the effect of a new quality management monitoring practice on firm performance and daily defects. We provide evidence that the intervention generally had a negative correlation with firm performance for those lines at the extreme ends of the complexity spectrum. Evidence consistent with a quantity-quality trade-off is also found, in that while the implementation of the new management practice was generally adversely associated with all aspects of firm performance, it had the desired effect of reducing the number of daily quality defects observed after the intervention.

Date: 2025
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