The financial impact of product recall announcements in China

International Journal of Production Economics

Volumn 142, Issue 1, 2013, Pages 115-123

  Zhao, Xiande ^a,b   Li, Yina ^a   Flynn, Barbara B ^c  

^a SOUTH CHINA UNIVERSITY OF TECHNOLOGY   (China)

^b CHINA EUROPE INTERNATIONAL BUSINESS SCHOOL   (China)

^c INDIANA UNIVERSITY   (United States)

Author keywords

China; Event study; Product recall; Stock market reaction; Supply chain quality

Indexed keywords

ABNORMAL RETURNS; BRAND EQUITY; CHINA; CHINESE COMPANIES; EVENT STUDIES; FINANCIAL IMPACTS; FINANCIAL LOSS; FOOD INDUSTRIES; LONG-TERM DAMAGES; PRODUCT RECALLS; STOCK MARKET;

AUTOMOTIVE INDUSTRY; FINANCE; LOSSES; RESEARCH; SUPPLY CHAINS;

COMMERCE;

EID: 84873405263     PISSN: 09255273     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.ijpe.2012.10.018     Document Type: Conference Paper

References (52)

1. H. Beales, M.B. Mazis, S.C. Salop, and R. Staelin Consumer search and public policy Journal of Consumer Research 8 1 1981 11 22
2. W. Boulding, and A. Kirmani A consumer-side experimental examination of signaling theory: do consumers perceive warranties as signals of quality? Journal of Consumer Research 20 1 1993 111 123
3. P. Bromiley, and A. Marcus The deterrent to dubious corporate behavior: profitability, probability and safety recalls Strategic Management Journal 10 3 1989 233 250
4. E.T. Cheah, W.L. Chan, and C.L. Chieng The corporate social responsibility of pharmaceutical product recalls: an empirical examination of U.S. and U.K. markets Journal of Business Ethics 76 4 2007 427 449
5. Y. Chen, S. Ganesan, and Y. Liu Does a firm's product recall strategy affect its financial value? An examination of strategic alternatives during product-harm crises Journal of Marketing 73 6 2009 214 226
6. T.Y. Choi, and Y. Hong Unveiling the structure of supply networks: case studies in Honda, Acura, and Daimler Chrysler Journal of Operations Management 20 5 2002 469 493
7. T.H. Chu, C.C. Lin, and L.J. Prather An extension of security price reactions around product recall announcements Quarterly Journal of Business and Economics 44 3/4 2005 33 48
8. B.L. Connelly, S.T. Certo, R.D. Ireland, and C.R. Reitzel Signaling theory: a review and assessment Journal of Management 37 1 2011 39
9. W.N. Davidson, and D.L. Worrell The effect of product recall announcements on shareholder wealth Strategic Management Journal 13 6 1992 467 473
10. N. Dawar, and M.M. Pillutla Impact of product-harm crises on brand equity: the moderating role of consumer expectations Journal of Marketing Research 37 2 2000 215 226
11. P.J. DiMaggio, and W.W. Powell The iron cage revisited: institutional isomorphism and collective rationality in organizational fields American Sociological Review 48 2 1983 147 160
12. T.D. Dowdell, S. Govindaraj, and P.C. Jain The Tylenol incident, ensuing regulation, and stock prices Journal of Financial and Quantitative Analysis 27 2 1992 283 301
13. F.F. Fama Efficient capital markets: a review of theory and empirical work The Journal of Finance 25 2 1970 383 417
14. J. Galaskiewicz, and S. Wasserman Mimetic processes within an interorganizational field: an empirical test Administrative Science Quarterly 34 3 1989 454 479
15. S. Govindaraj, B. Jaggi, and B. Lin Market overreaction to product recall revisited- the case of Firestone tires and the Ford Explorer Review of Quantitative Finance and Accounting 23 1 2004 31 54
16. J. Han, J.H. Trienekens, and S. Omta Relationship and quality management in the Chinese pork supply chain International Journal of Production Economics 134 2 2011 312 321
17. P.R. Haunschild, and M. Rhee The role of volition in organizational learning: the case of automotive product recalls Management Science 50 11 2004 1545 1560
18. H. Heerde, K. Helsen, and M.G. Dekimpe The impact of a product-harm crisis on marketing effectiveness Marketing Science 26 2 2007 230 248
19. W.J. Henisz, and A. Delios Uncertainty, imitation, and plant location: Japanese multinational corporations, 1990-1996 Administrative Science Quarterly 46 3 2001 443 475
20. K.B. Hendricks, and V.R. Singhal The effect of supply chain glitches on shareholder wealth Journal of Operations Management 21 5 2003 501 522
21. G.E. Hoffer, S.W. Pruitt, and R.J. Reilly Automotive recalls and informational efficiency The Financial Review 22 4 1987 433 442
22. G.E. Hoffer, S.W. Pruitt, and R.J. Reilly The impact of product recalls on the wealth of sellers: a reexamination The Journal of Political Economy 96 3 1988 663 670
23. M.H. Jansen-Vullers, C.A. Van Dorp, and A.J. Beulens Managing traceability information in manufacture International Journal of Information Management 23 5 2003 395 413
24. G. Jarrell, and S. Peltzman The impact of product recalls on the wealth of sellers The Journal of Political Economy 93 3 1985 512 536
25. Jolly, D., Mowen, J., 1984. Product recall communications: the effects of source, media, and social responsibility information. Advances in Consumer Research, Association for Consumer Research, E. Hirschman and M. Holbrook (eds.)., 471-475.
26. P.I. Karipidis Market evaluations of dimensions of design quality International Journal of Production Economics 129 2 2011 292 301
27. C. Kelley An investigation of consumer product warranties as market signals of product reliability Journal of the Academy of Marketing Science 16 2 1988 72 78
28. M.A. Ketokivi, and R.G. Schroeder Strategic, structural contingency and institutional explanations in the adoption of innovative manufacturing practices Journal of Operations Management 22 1 2004 63 89
29. A. Kirmani The effect of perceived advertising costs on brand perception Journal of Consumer Research 17 2 1990 160 171
30. A. Kirmani, and P. Wright Money talks: perceived advertising expense and expected product quality Journal of Consumer Research 16 3 1989 344 353
31. C. Lo, A. Yeung, and T. Cheng ISO 9000 and supply chain efficiency: empirical evidence on inventory and account receivable days International Journal of Production Economics 118 2 2009 367 374
32. C. Lo, A. Yeung, and T. Cheng Meta-standards, financial performance and senior executive compensation in China: an institutional perspective International Journal of Production Economics 129 1 2011 119 126
33. M.A. Lyles, B.B. Flynn, and M.T. Frohlich All supply chains don't flow through: understanding supply chain issues in product recalls Management and Organization Review 4 2 2008 167 182
34. Margolis, J.D., Elfenbein, H., Walsh, J., 2007. Does it Pay to be Good? A Meta-analysis and Redirection of Research on Corporate Social and Financial Performance. Working paper.
35. R.G. McFarland, J.M. Bloodgood, and J.M. Payan Supply chain contagion Journal of Marketing 72 2 2008 63 79
36. A. McWilliams, and D. Siegel Event studies in management research: theoretical and empirical issues Academy of Management Journal 40 3 1997 626 656
37. M. Orlitzky, F.L. Schimdt, and S. Rynes Corporate social and financial performance: a meta-analysis Organization Studies 24 3 2003 403 441
38. S.W. Pruitt, and D.R. Peterson Security price reactions around product recall announcements The Journal of Financial Research 9 2 1986 113 122
39. R.J. Reilly, G.E. Hoffer, and E. George Will retarding the information flow on automobile recalls affect consumer demand? Economic Inquiry 21 3 1983 444 447
40. M. Rhee, and P.R. Haunschild The liability of good reputation: a study of product recalls in the U.S. automobile industry Organization Science 17 1 2006 101 169
41. N.G. Rupp Are government initiated recalls more damaging for shareholders? Evidence from automotive recalls, 1973-1998 Economics Letters 71 2 2001 265 270
42. D.S. Siegel, and D.F. Vitaliano An empirical analysis of the strategic use of corporate social responsibility Journal of Economics & Management Strategy 16 3 2007 773 792
43. G. Siomkos, and G. Kurzbard The hidden crisis in product-harm crisis management European Journal of Marketing 28 2 1994 30 41
44. M.R. Thomsen, and A. McKenzie Market incentives for safe foods: an examination of shareholder losses from meat and poultry recalls American Journal of Agricultural Economics 83 3 2001 526 538
45. Y.K. Tse, and K.H. Tan Managing product quality risk and visibility in multi-layer supply chain International Journal of Production Economics 139 1 2012 49 57
46. X. Wang, D. Li, and C. O'Brien Optimization of traceability and operations planning: an integrated model for perishable food production International Journal of Production Research 47 11 2009 2865 2886
47. X. Wang, D. Li, C. O'Brien, and Y. Li A production planning model to reduce risk and improve operations management International Journal of Production Economics 124 2 2010 463 474
48. Wen, J.B., 2009. Report on the work of the government [online]. Available from: 〈http://news.xinhuanet.com/english/2008-03/19/content-7818043. htm〉 (accessed 19 March 2009)
49. J.L. Wiener Are warranties accurate signals of product reliability? Journal of Consumer Research 12 2 1985 245 250
50. P. Wright Schemer schema: consumers intuitive theories about marketers' influence tactics R.J. Lutz, Advances in Consumer Research, 13 1986 Association for Consumer Research Provo, UT 1 3
51. P. Wright, S.P. Ferris, J.S. Hiller, and M. Kroll Competitiveness through management of diversity: effects on stock price valuation Academy of Management Journal 38 1 1995 272 287
52. V.A. Zeithaml Consumer perceptions of price, quality and value: a means-end model and synthesis of evidence Journal of Marketing 52 3 1988 2 22