Is pursuing multiple certifications beneficial for firms? A firm risk perspective

Certifications (such as ISO 9001, ISO 14001, and GAP) require firms to assess various risks (quality, environmental risks, food safety). However, the implementation of certifications can paradoxically increase risk as firms need to balance everyday operations alongside development of compliant management processes and organizational routines. Yet the adaptation of the routines across multiple certifications over time can serve as risk mitigating mechanism – as firms transfer the routines across certifications and increase the scope of risk assessment. Based on panel data from 2010 to 2021 (including 4400 observations from 345 listed agricultural enterprises in China), we show that risk initially increases (and then decreases) as firms adopt multiple certifications (following an inverted U-shaped pattern). Strategic aggressiveness influences this relationship - with highly aggressive firms reaching a turning point and reducing risk earlier. While firms can address risk by obtaining multiple certifications, the desired outcome only occurs after a critical number of certifications is achieved. We put forward practical implications based on the findings.