Can a signal mitigate a dilemma? Quality management standards, corruption, and business ethics

Barkat Ullah, Zuobao Wei and Yicheng Zhu

International Review of Economics & Finance, 2023, vol. 86, issue C, 701-716

Abstract: In this study, we employ theWorld Bank Enterprise Survey (WBES)data for 93,570 firms in 141 mostly developing countries to examine the signaling value of International Organization for Standardization (ISO) certification and the role corruption plays in the signaling value of ISO adoption. We also investigate whether ISO adoption reduces the magnitude of corruption activities in corrupt business environments. We find that ISO adoption can facilitate firm sales growth and the signaling value of ISO adoption increases as corruption at both firm and country levels increases. In corrupt business environments, ISO adoption has a moderating effect on corruption activities.

Keywords: Quality management standards; International organization for standardization (ISO); Corruption; Firm growth; Information asymmetry; Signaling (search for similar items in EconPapers)
JEL-codes: G00 O11 O40 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:86:y:2023:i:c:p:701-716

DOI: 10.1016/j.iref.2023.03.042

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