Recovering a lost ISO 9001 certification: what is the economic impact?

This study assesses the economic impact of ISO 9001 certification recovery following a medium-term period of withdrawal. Data from the Amadeus database is used to implement an event study that matches a sample of Portuguese companies that recover their ISO 9001 certification after operating a full year without such certification with a set of similar but, non-event, counterpart firms. Results show no statistically significant differences in the economic performance of the two groups of companies as measured by the return-on-assets, return-on-sales, and sales growth ratios. Contrary to the predictions of the current theory, this study suggests that certification recovery under ISO 9001 is neither beneficial nor detrimental to firm performance since such an event has no significant impact on the economic performance of the sample companies. This suggests that the decision to recover a lost certification is economically irrelevant for firms that experienced a one-year lag without being certified. This is one of the first studies to assess the impact of ISO 9001 certification recovery after a period of certification withdrawal, and the first to do so exclusively from a financial perspective. The study contributes to understand why only a small proportion of decertified companies (17%) subsequently recover their certification.