Excellence or selection? The chicken-and-egg dilemma in the EFQM Excellence Model and its impact on firm performance

Purpose This study investigates whether EFQM Excellence Model recognition is associated with subsequent changes in firm performance, addressing the long-standing “chicken-and-egg” problem of whether superior-performing firms self-select into EFQM recognition or whether recognition is followed by performance improvements. Design/methodology/approach The study uses a longitudinal firm-level panel dataset covering 2016–2025, constructed by combining EFQM recognition records with financial and operational data from the ORBIS database. The sample comprises firms from manufacturing, services, wholesale and retail, and other business-related sectors across multiple European countries. A quasi-experimental design combines propensity score matching, difference-in-differences estimation and event-study analysis to distinguish pre-existing selection differences from changes associated with EFQM recognition. Firm performance is assessed using four complementary measures: return on assets, return on sales, revenue growth and labour productivity. Findings The results indicate that EFQM recognition is associated with statistically significant post-recognition improvements in profitability and operational performance. Event-study estimations further show no evidence of significant pre-recognition performance differences between treated and control firms, which supports the plausibility of the parallel-trends assumption and strengthens but does not establish the causal interpretation of the findings. Research limitations/implications Although the study employs a robust quasi-experimental design, the findings remain subject to the quality and completeness of the available firm-level financial and organisational data. In addition, the empirical design cannot fully eliminate the possibility of unobserved, time-varying organisational heterogeneity across firms and countries. Practical implications The results suggest that EFQM recognition is associated with measurable performance improvements, supporting its potential role as a managerial capability-building framework rather than merely a signalling mechanism. Originality/value This study contributes to the quality management and organisational performance literature by providing longitudinal quasi-experimental evidence on the relationship between EFQM recognition and firm performance, while explicitly addressing endogeneity concerns that have limited prior research.