The impact of the TQM implementation on corporate financial performance—Based on empirical data of Chinese listed companies

This paper investigates the impact of the TQM implementation on financial performance of the firm by a sample of public companies that have won China Quality Award from 2001 to 2007 in the mainland of China by using Event study and Panel analysis methods. Our results show that the market share enjoys a significant increase, the ratio of cost to sales is remarkably increased, the asset turnover rate does not change significantly, and the return on total assets shows a significant decrease since firms have won the quality awards. The changes of financial performance of quality award winners are different with companies' size, capital intensity, degree of diversification and the time of awards announcement. In window periods sample firms which are larger, low diversified and newly quality awards winners have better financial performance than other sample firms, the degree of capital intensity has no effect on the financial performance after implementing TQM.