How innovativeness and institution affect ISO 9000 adoption and its effectiveness: evidence from small and medium enterprises in China

Innovation studies show that innovative firms are more likely to change existing routines and operation procedures and create new ones. Neo-institutionalism, however, suggests that small and medium enterprises (SMEs) suffering from strong legitimacy constraints tend to conform to isomorphic institutional pressure, especially when they expand into the international market. However, there has been little empirical research on why, how and with what outcomes SMEs from China, the world's largest emerging market, adopt the International Organization for Standardization (ISO) 9000 certification as a legitimisation strategy. Using a survey sample of 561 Chinese SMEs, this study shows that innovative SMEs are more likely to get ISO 9000 certification, because they face more stringent institutional pressure as well as less internal obstruction. This propensity for ISO 9000 certification is strengthened when SMEs have an export business and need to deal with multiple institutional constraints. Additionally, we find that SMEs may maximise their performance benefit from the certification when they operate in multiple institutional contexts. This study is one of the first empirical studies from China explaining how innovativeness and multiple institutional constraints influence the likelihood and outcomes of SMEs' ISO 9000 adoption.