Crisis Management Strategies and the Long-Term Effects of Product Recalls on Firm Value

被引:122
作者
Liu, Yan [1 ]
Shankar, Venkatesh [2 ,3 ]
Yun, Wonjoo [4 ]
机构
[1] Texas A&M Univ, Mays Business Sch, Dept Mkt, Mkt, College Stn, TX 77843 USA
[2] Texas A&M Univ, Mays Business Sch, Mkt, College Stn, TX 77843 USA
[3] Texas A&M Univ, Mays Business Sch, Ctr Retailing Studies, College Stn, TX 77843 USA
[4] Oakland Univ, Mkt, Rochester, MI 48063 USA
关键词
product recall; firm value; crisis management; advertising; long-term effects; SOCIAL MEDIA; HARM CRISES; MARKET; SALES; IMPACT; RETURNS; EVENT; RISK; INFORMATION; INNOVATIONS;
D O I
10.1509/jm.15.0535
中图分类号
F [经济];
学科分类号
02 ;
摘要
Companies increasingly face product harm crises resulting in product recalls, which often have a negative impact on firm value. Whereas prior research has studied the short-term effects of product recalls on firm value, the authors of this article focus on the long-term effects. They develop a conceptual framework and hypotheses about the main effect of recall volume and the moderating effects of crisis management strategies on the relationship between recall volume and long-term firm value. They empirically test the hypotheses in the auto industry context using both short-term abnormal returns analysis and long-term calendar-time portfolio analysis of 280 product recalls during 2005-2015. The findings reveal that the negative impact of product recall volume lingers over time. Brand (promotion) advertising has a significant positive (negative) effect on the relationship between recall volume and long-term abnormal returns. Furthermore, both voluntary recall initiation and postrecall remedial efforts positively moderate the impact of recall volume on long-term returns. These moderating effects are contrary to those in the short term. The results suggest that managers should use different advertising types during and after a recall, strategically initiate recalls, and diligently prepare postrecall remedies to mitigate the negative effects of recall volume on long-term return.
引用
收藏
页码:30 / 48
页数:19
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