Article2005

An Extension of Security Price Reactions Around Product Recall Announcements

Ting‐Heng Chu · Che‐Chun Lin · Larry J. Prather

65 citations0/0 files storedQuarterly journal of business and economics

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Financial Markets and Investment Strategies Corporate Finance and Governance Financial Analysis and Corporate Governance

Abstract

We examine 269 non-automotive product recall announcements that were published in the Wall Street Journal Index between January 1984 and December 2003. Consistent with previous research, we find statistically significant negative abnormal returns on, and one day prior to, the announcement date. Mean cumulative abnormal returns are not statistically significant over the preand post-announcement periods, however, providing evidence in support of the efficient market hypothesis (EMH). These results are robust with respect to the selected index, beta estimation method, and assumption about the behavior of residuals. Moreover, empirical results suggest that important differential industry effects exist and that companies in the drugs/cosmetics industry suffer most from their recall announcements.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 65 citations exist upstream.

References

1986Generalized autoregressive conditional heteroskedasticity 1991Conditional Heteroskedasticity in Asset Returns: A New Approach 1977Estimating betas from nonsynchronous data 1991Event-study methodology under conditions of event-induced variance 1976Corporate Forecasts of Earnings Per Share and Stock Price Behavior: Empirical Test 1983On corporate governance 1989Conditional Heteroscedasticity in Time Series of Stock Returns: Evidence and Forecasts 1992Nonparametric event study tests

Cited by

2010Evaluating Customer Information Breaches as Service Failures: An Event Study Approach 2016Stock Market Reaction to Quality, Safety, and Sustainability Awards in Logistics 2015The effect of a toy industry product recall announcement on shareholder wealth 2017Let Me Make It Up to You: Understanding the Mitigative Ability of Corporate Social Responsibility Following Product Recalls 2017Learning from Conformance Quality Failures That Triggered Product Recalls: The Role of Direct and Indirect Experience

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.