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Whereas the majority of research explores the direct relationship between quality management practices and firm operational performance using data on developed economies, this paper asserts that the effect of quality management practices on firm operational performance needs to be evaluated with reference to the contingency approach, especially in developing countries. Therefore, the authors empirically test whether competitive intensity moderates the relationship between quality management practices and inventory management process.

The authors employ a fixed-effect model on data from more than 7,000 observations operating in 27 Eastern and Central European countries.

The findings reveal that the adoption of quality management practices decreases inventory days only in a highly competitive market. Additionally, the results indicate that this effect is changing when distinguishing between countries and sectors.

This study advances research on quality management practices by emphasizing the importance of contingency and institutional approach.