The paper explores the bi-directional relationship between ISO 14001 certification and financial performance with the aim of shedding light on whether better performance is due to the beneficial effects of ISO 14001 or due to selection-effects where better performance precedes accreditation. The study uses a five year longitudinal analysis to compare the financial performance of firms in Spain before and after certification. The results of a multivariate panel data analysis find that firms with better than average performance have a greater propensity to pursue accreditation but there is no evidence that improvements in performance follow certification. This suggests that the inference that environmental variables cause improved financial performance may be unwise in research studies that can only measure association.

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Purpose -The adoption of the ISO 9001 Quality Management Systems Standard has proven to be a persistent and growing phenomenon in services and manufacturing, yet to date little research has been done that can indicate how far improved business performance can be attributed to it rather than counter-intuitive causes. The paper aims to examine the evidence for the causal links between quality management system certification and improved performance in the empirical literature. Design/methodology/approach -A method is proposed for testing how far performance improvement can be attributed to quality management system certification and how far attribution to other causes applies. This method is illustrated on a longitudinal study and then utilised to interpret the findings of other longitudinal studies. Findings -It is concluded that although there is some evidence to indicate that quality management system certification has some causal influence on business performance, there is also evidence for the existence of a substantial mechanism whereby better performing firms self-select to adopt certification. Possible causes for this mechanism are discussed. Research limitations/implications -The existence of a self-select mechanism has profound implications for interpreting business performance achievements associated with quality management system certification because the benefits found may well be inflated by its presence. The authors suggest that richer theory is needed that can incorporate bi-directional influences and new research is needed to explore the underlying causes of adoption selection effects. Originality/value -The paper provides researchers with a method for testing and discussing causation influences on results. It provides evidence that a substantial part of the association found in the research on quality management system certification and business benefits may be due to counterintuitive causes.Keywords Performance management, ISO 9000 series, Cause and effect analysis, QualityPaper type Research paper Introduction Although most "new" ideas in management have short life spans and are discarded when eclipsed by the next fad (Carson et al., 2000), adoption of third party accredited ISO quality management system standards has proven to be a persistent and growing phenomenon. Its persistence suggests that it is not simply another management fad but will remain an influential global management meta-standard (Uzumeri, 1997).

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