Impact of ISO9001 Certification on the Beverage Company's Performance: A Case Study of Brewery Companies in Ethiopia

Abstract

This study  tries to shade light on the effect of ISO9001 on Performance of Brewery companies in Ethiopia. It empirically analyzes the impact of ISO9001 on the performance of brewery company's proxied by profit of companies during the sample period of 2002-2015.The sample consists three brewery companies namely: BGI-Ethiopia, Metha-Abo and Dashen brewery companies. The methodology is based on the Fixed effect model estimator  proposed for dynamic panel data, which is strong in the presence of endogenous covariates, allowing for individual companies fixed effects, heteroskedasticity and autocorrelation. Based on our findings, out of the four independent variables average revenue and dummy of ISO9001 are positive and significant effect on companies profit i.e an increase (decrease) in average revenue of companies  results in a 5.517 percent increase (decrease) in the company's profit. The result indicates that ISO9001 certification does have a strong significant positive impact on brewery companies performance. As the result revealed a company's profit increases by 1.052% due to ISO9001 certification. The other two explanatory variables average cost and natural logarithm of  total sale become statistically  insignificant. In sum, the result of the study indicates that  Having ISO9001 certification improves the profitability of the brewery companies. This finding seems to agree with the study done by Dejene Tulu (2011) on five brewery companies in Ethiopia and other scholars like Sharma(2005),Pinar(2001) and Singles et al.(2000).

Keywords: ISO9001, Brewery companies, performance, ,fixed-effect model.

DOI: 10.7176/IEL/10-1-02

Publication date: January 31^st 2020