Stock price impact on the Taiwan National Quality Award

Abstract

The effects of a national quality award (NQA) on the market value of the award-winning firms have been reviewed in many countries, but relevant studies are rare to find in Taiwan. This study empirically examined the issue related to the market valuation of firms that undergo effective quality improvement programmes (which sometimes are referred to as total quality management) using Taiwan National Quality Award as the indicator that an effective quality improvement programme has been implemented. In this study, we intended to compare the NQA Index (which represents the performance of National Quality Award winners' stock price) with the Sector Index (which represents public traded companies’ average stock price performance of the sector), and eventually, from the empirical comparison, no statistical evidence was found to support the hypothesis that the stock performance of the quality award winners is superior to the average rate of return on the stock market.

Keywords:

• national quality award
• total quality management
• stock market reaction
• statistical analysis