The Signal Impact Of Occupation Health And Safety Management System Certification

With the improvement of consumers’ cognitive level,recent years has witnessed a steady increase in certification of domestic enterprises to strengthen quality management and/or to expand market share.While most enterprises selected the type of certification based on the scope of main business,there is a strange phenomenon that some enterprises didn’t.The typical example is the OHSMS(Occupation Health and Safety Management System)certifications in producer services.So far,more than tens of thousands OHSMS certifications have been issued.Intuitively,requirements in OHSMS certification,such as construction standards and risk control,have little influence on the producer services,which is much safer than other industries naturally.Since little benefit existed,the preference of this "useless" certification seems contrary to the traditional "rational man" hypothesis.From the perspective of information economics,this study considers that high-quality firms deliver high-quality signals through OHSMS certifications to the market with the purpose of distinguishing themselves from the inferior ones when facing adverse selection.Customers hold that certifications imply higher quality,so that firms with OHSMS certification can achieve higher returns.In this case,this study builds a mathematical model to explore how OHSMS certifications convert experience goods into search goods.After that,we conduct an empirical analysis using financial data from the second economic census in China and certification data from CNCA(Certification and Accreditation Administration of the People’s Republic of China).It is worth mentioning that the CEM(Coarsened Exact Matching)and PSM(Propensity Score Matching)method used in our study can tackle the problem of endogeneity in the regressions efficiently.This study studies the impacts of OHSMS certification upon operational performance of producer service firms in China mainly from three aspects: the marketing performance,the profitability and the management performance.The results show that:Firstly,an enterprise’s certification decision is endogenous,and an overestimation of policy effects exists if we ignore this endogeneity.Secondly,the main influence of OHSMS certifications on producer service firms in China is the signal impact.Although OHSMS certifications cannot improve enterprises’ productivity,they can be used as a special advertisement in the asymmetric information environment to deliver high-quality signals,to reduce transaction costs,and to gain market competition advantages.The question why enterprises apply for "useless" certification is answered now.Thirdly,further study proves that the signal impact is short-term.The advantage in sales increases gradually in three years after certification,but decreases then.At the same time,the signal impact is more obvious in a competitive industry or an underdeveloped region.Finally,this study presents recommendations: the government should adjust regulatory approach to improve the effectiveness of certifications.At the same time,special attention should be paid to avoid rash certification in order to achieve long-term development.Then infrastructure should be strengthened so as to relieve information asymmetry and improve information transmission efficiency.