Data quality and firm performance: empirical evidence from the Korean financial industry

Despite popular belief that timely and precise data are important and indispensable to good decisions and that good decisions are related to better firm performance, empirical research that examines the effect of data quality on firm performance is still scarce. How great an impact does data quality have on firm performance? This study empirically investigates the effect of firm-level data quality on firm performance in the Korean financial industry during 2008–2010. The results show that commercial banks have high-quality data, while credit unions have comparatively low-quality data. They also show that better data quality has a positive influence on sales, operating profit, and value added. Improving the level of data quality management maturity by one can increase firm performance by 33.7 % in sales, 64.4 % in operating profit, and 26.2 % in value added.

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