work uses a simultaneous equation system approach to analyze the relationship
between the Management and Business Quality of companies and their market Price
Quality. Using panel data we found that both the Management and the Business Quality
of companies positively influence the Market Price Quality of the studied American
companies. Additionally, variables like the actual position of the company
Price Quality compared to the industry average, being on the top or the bottom,
or the beta value of a company, also influence the market Price Quality of the
respective company. It is shown that the system equation approach is the most
appropriate to explain the linkages between Price, Business and Management
Quality providing consistent estimates. Also, using ratings to express the
three core variables in the system is the most adequate way to define the
quality characteristics in terms of Price, Management and Business performance
of the companies considered in this study.
JEL Classification: M16, M21, C33.
Keywords: Management and Business Quality, Market Price quality, Simultaneous Equations
Approach, Panel Data.