The Extrusion Effect Of Brand Umbrella To Enterprise External Certification

With the rapid development of economic globalization and China's market economy, the third party authentication has become an essential arrangement of system. Under the circumstances of unequal accesses to information, it is not enough to have integrity alone. Businesses need more authoritative, reliable, impartial third-party certification to improve the inner qualities and external credibility, so that products may enter the international market sooner. For consumers, the asymmetric information increases the choice cost and reduces the efficiency of resource allocation, they need some kind of signal as the selection basis. The significance of certification is to provide a valid signal, whose signal screening and display mechanism can effectively alleviate the problem of asymmetric information, improve product quality and ensure product safety. Third-party certification is an important part of regulating the market, it is necessary to study in an economic perspective.With the rapid development of third-party certification, what cannot be ignored is that many large well-known companies are not keen on third-party certification. The reason is that they themselves have a separate brand and they would like to follow the brand name has been established at the time of launch of new experiences commodities. Through the strong brand umbrella effect, it makes up the third-party certification of the signaling function. This article will introduce the brand umbrella as the main factors encouraging enterprises to participate in the third-party certification, taking into account the basic properties of enterprise and industry market and other factors, which provides a new perspective for studying enterprise certification incentives.Firstly, we study the domestic and foreign relevant theories about third-party certification and combined with our current status of certification, revealing substitute relationship of umbrella brand and external certification in the perspective of corporate reputation. Then we analyze the extrusion effect and formal mechanism of external authentication through building the certification market equilibrium model. we test it from two aspects of certification will and strength by Heckman two-stage model regression, using the cross-sectional data of 1548 listed manufacturing companies in 2013.The study found that there was a significant negative correlation between the brand umbrella and enterprises certification, it means that there is a partial or complete alternative to the relationship between them. The more powerful brand, the weaker willingness of enterprises certification. For the companies has been involved of third-party certification, which have strong brands are more inclined to participate in two or more external authentication. Finally, we put forward a series of constructive policy recommendations for enterprises involving in the certification rationally and improving the effectiveness of certification.