HACCP certification in food industry: Trade-offs in product safety and firm performance

Ensuring food quality and safety in a fiercely competitive market is one of the most important tasks of a food company. An emerging conflict in operations management and production economics has arisen from the varied interpretations of the roles and effects of safety management systems. Although most studies have confirmed that Hazard Analysis and Critical Control Points (HACCP) is an effective management tool in ensuring the safety of finished food products, empirical clarity has yet to be attained with respect to the financial impact of HACCP implementation by firms. Using an event study methodology, we collected a set of food industry panel data to determine differences in firm performance between HACCP adopters and non-adopters through the lens of institutional theory. The results indicate that HACCP certification has both short- and long-term impacts on firm profitability, manufacturing productivity, and asset turnover. Additionally, this study reveals that the implementation of HACCP leads to rapid market growth in the short run. Finally, it also explores the practical implications for food companies of product safety management.