International Quality Certification and Business Performance of Indian Firms: Evidence from Enterprise Survey Data

Abstract

This article analyses the difference in firm’s performance between enterprises with and without international quality certification. The study is based on a comprehensive survey of 9,281 Indian firms operating in different regions of the country, conducted under the World Bank’s Enterprise Survey. About 44.9 per cent of the firms have adopted international quality certification for enhancing the quality of their business processes. Chi-square statistics indicate that there is a significant difference in enterprise characteristics by international quality certification. Result of the analysis of variance indicates a significant difference in business performance with and without quality certification in terms of sales, employment growth rates and capacity utilization. Firms with international quality certification perceive comparatively less obstacles than those who are not having international quality certification. This study provides insights on differences in firms’ performance and business obstacles faced by them with or without international quality certification. This study can be helpful in designing policies for promoting certification and accreditation of product quality and processes across business enterprises in a focused manner.