Inventory management efficiency and firm performance: empirical research for non-quality and quality-certified firms

Purpose This research has two main purposes. Firstly, it aims to investigate the influence of quality certificates on firm performance. Secondly, it endeavors to evaluate the relationship between inventory management efficiency (IME) and firm performance for non-quality-certified and quality-certified firms. Design/methodology/approach The data were retrieved from the Albertina database for the period spanning 2018–2022. To evaluate the hypotheses posited in this research, a two-step system generalized method of moments (GMM) technique was employed. Findings Based on the empirical findings, it can be deduced that quality certificates obtained from the European Foundation for Quality Management (EFQM) Excellence Model have a positive effect on firm performance. Furthermore, there is a positive relationship between IME and firm performance for both quality-certified and non-quality-certified firms. In addition, the relationship between the IME and firm performance for quality-certified firms is significantly higher compared to those firms that have not obtained such certification. Practical implications The current research provides a step-by-step explanation and interpretation of control variables, dummy variables, and dummy interaction terms from economics, finance, and business perspectives. Hence, the research is useful to researchers, scholars, and academics. The findings of this research will encourage directors and managers of firms to implement the EFQM Model within their respective firms. Thus, the current research will be beneficial to academics, business management, and other stakeholders. Originality/value This is the first empirical research that focuses on the IME and the firm’s performance of quality-certified and non-quality-certified firms.