Change of Stock Earning Rate on Korean Quality Award Recipients: The comparison between KQA Index and Baldridge Index

The purpose of this research is to understand the effects of Quality Management Award on stock prices movement and to examine the comparative advantages of quality award system in Korea and the US. This study compares the performances of QM Award companies in the stock market with those of the market index in both countries. We develop Korean Quality Award Index (KQA Index) based on the Baldridge Index of NIST in the US. We inspect three studies. Study 1 tests if the performance of MB Award winners and S&P500 index have a difference in the stock market. Study 2 tests if the performances of KQA winners and KOSPI (Korean Composite Stock Price Index) have a difference in the stock market. Study 3 tests if the performances of KQA winners and MB Award winners have a difference in the stock market. From the empirical tests, the performances of KQA winners are superior to those of KOSPI and performances of MB Award winners are superior to those of S&P500 and the performance of MB Award winners are superior to those of KQA winners.