The Impact of a New Quality Management Practice on Firm Performance: Evidence from Pakistan

Mahvish Faran and Karl Taylor
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Mahvish Faran: University of Sheffield

No 14875, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper uses a novel firm level data set to investigate the impact of a unique quality management practice on the production and productivity of a large-scale garments manufacturer in Pakistan. The analysis provides evidence that production complexity is an important element in determining the impact of management practices, as there are sizeable differences in the effects between complex and basic lines of assembly. Most specifications show that the implementation of the new quality management practice has a negative impact on lines at the extreme ends of the complexity spectrum, while conversely it has a positive impact on those basic lines which exhibit the highest levels of complexity. We find evidence consistent with a quantity-quality trade off, in that whilst the implementation of the new management practice generally adversely impacted upon productivity it had the desired effect of reducing the number of daily quality defects observed after the intervention.

Keywords: quality management practice; productivity; production complexity (search for similar items in EconPapers)
JEL-codes: L2 M2 O14 O32 O33 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2021-11
New Economics Papers: this item is included in nep-dev, nep-eff and nep-lma
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Forthcoming - forthcoming in: Economic Development and Cultural Change, 2025

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Working Paper: The Impact of a New Quality Management Practice on Firm Performance: Evidence From Pakistan (2021)
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