Market Interpretation of Iso 9000 Registration

Abstract Since 1990, many U.S. firms have registered under the provisions of the ISO 9000 standard. Meeting the qualifications of this registration requires considerable time and money. To this point, the justification has been put in terms of management commitment to quality, cost reduction, or opening new markets, particularly international markets. We contribute by examining the reaction of the firms' stock price to the announcement of ISO 9000 registration. We find that for the smallest firms, ISO 9000 registration is regarded as positive information by investors. We also find that the market reaction to ISO 9000 registration is sensitive to the signing of the Maastricht Treaty in 1992.