ESG Investment as a Problemistic Search: The Impact of Product Recalls by Competitors Sharing Parent-Country Ties on ESG Investment among Global Automakers

2020 ◽  
Vol 28 (3) ◽  
pp. 61-96
Author(s):  
Eunjung Hyun ◽  
Nara Yoon
Keyword(s):  
1985 ◽  
Vol 93 (3) ◽  
pp. 512-536 ◽  
Author(s):  
Gregg Jarrell ◽  
Sam Peltzman
Keyword(s):  

2021 ◽  
Author(s):  
Omesh Kini ◽  
Mo Shen ◽  
Jaideep Shenoy ◽  
Venkat Subramaniam

In this paper, we study the impact of labor unions on product quality failures. We use a product recall as our measure of quality failure because it is an objective metric that is applicable to a broad cross-section of industries. Our analysis employs a union panel setting and close union elections in a regression discontinuity design framework to overcome identification issues. In the panel regressions, we find that firms that are unionized and those that have higher unionization rates experience a greater frequency of quality failures. The results obtain even at a more granular establishment level in a subsample in which we can identify the manufacturing establishment associated with the recalled product. When comparing firms in close elections, we find that firms with close union wins are followed by significantly worse product quality outcomes than those with close union losses. These results are amplified in non–right-to-work states, where unions have a relatively greater influence on the workforce. We find that unionization increases firms’ costs and operating leverage and, consequently, crowds out investments that potentially impact quality. We also find some suggestive evidence that unions may compromise quality by hurting employee morale and by resisting technological upgrades in the firm. Overall, our results suggest that unions have an adverse impact on product recalls, and thus, product quality is an important dimension along which unions impact businesses. This paper was accepted by Gustavo Manso, finance.


2013 ◽  
Vol 44 (2s) ◽  
Author(s):  
Lorenzo Comba ◽  
Fabrizio Dabbene ◽  
Paolo Gay ◽  
Cristina Tortia

Even though the main EU regulations concerning food traceability have already entered to force since many years, we still remark very wide and impacting product recalls, which often involve simultaneously large territories and many countries. This is a clear sign that current traceability procedures and systems, when implemented with the only aim of respecting mandatory policies, are not effective, and that there are some aspects that are at present underestimated, and therefore should be attentively reconsidered. In particular, the sole adoption of the so-called “one step back-one step forward traceability” to comply the EC Regulation 178/2002, where every actor in the chain handles merely the data coming from his supplier and those sent to his client, is in fact not sufficient to control and to limit the impact of a recall action after a risk notification. Recent studies on lots dispersion and routing demonstrate that each stakeholder has to plan his activities (production, transformation or distribution) according to specific criteria that allow pre-emptively estimating and limiting the range action of a possible recall. Moreover, these new and very recently proposed techniques still present some limits; first of all the problem of traceability of bulk products (e.g. liquids, powders, grains, crystals) during production phases that involve mixing operations of several lots of different/same materials. In fact, current traceability practices are in most cases unable to deal efficiently with this kind of products, and, in order to compensate the lack of knowledge about lot composition, typically resort to the adoption of very large lots, based for instance on a considered production period. Aim of this paper is to present recent advances in the design of supply chain traceability systems, discussing problems that are still open and are nowadays subject of research.


1988 ◽  
Vol 96 (3) ◽  
pp. 663-670 ◽  
Author(s):  
George E. Hoffer ◽  
Stephen W. Pruitt ◽  
Robert J. Reilly
Keyword(s):  

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-12
Author(s):  
Songsong Li ◽  
Yaopan Yang ◽  
Dong Zhang

Product-harm crises can trigger product recalls or product discards, which is very likely to cause secondary pollution to the environment. Also, these crises may harm customers’ health and threaten firms’ survival. To foster low-carbon economy and green development in such complex systems, this paper studies the internal mechanism of the product crisis and its impact on the firm value. It proposes a two-stage model to avoid the endogeneity of product-harm crises. In the first stage, this paper assesses the effect of firms’ leverage on their capacity to produce higher quality products. In the second stage, this paper conducts the impact of these crises on stock prices. Then, it depicts the financial effects of product-harm crises over time, and analyzes the differences of such effects based on brand equity. Results show that book leverage can positively impact firms’ capacity to produce high-quality products. In addition, the market’s response to product-harm crises is significant at 1% level, and with the increase in severity, the market reaction is more prominent. Furthermore, its negative effect is persistent for a firm experiencing a severe crisis. Luckily, brand equity can mitigate this negative impact. These findings provide some ways to improve product performance and firm value in the green context.


2016 ◽  
Vol 42 (1) ◽  
pp. 161-174 ◽  
Author(s):  
Francesca Magno ◽  
Fabio Cassia ◽  
Marta Ugolini

The number of defective and unsafe products recalled from the market has increased dramatically in the last decade. While several studies have investigated consumer reaction to product recalls, the impact of such events on utilitarian versus hedonic attitudes towards the brand involved in the recall has not yet been assessed. Similarly, it is not clear whether brands with utilitarian positioning and brands with hedonic positioning are equally affected by recalls. Through an experiment based on a real-world stimulus from the laptop product category, this study shows that hedonic brands are more resistant to the negative effects of voluntary product recalls than are utilitarian brands. Furthermore, data show that brand familiarity mitigates the effect of the recall on utilitarian attitudes for both utilitarian and hedonic brands. Brand familiarity also positively moderates the impact of the recall on hedonic attitudes, but only for hedonic brands.


2008 ◽  
Vol 4 (2) ◽  
pp. 167-182 ◽  
Author(s):  
Marjorie A. Lyles ◽  
Barbara B. Flynn ◽  
Mark T. Frohlich

Our paper conceptualizes and highlights the role of the supply chains in China's product recall problems. We raise questions about the interrelationships of the focal manufacturer and the supplier firms and the consequences of these relationships. We address some of the causes of the current situation, including a discussion of deep supply chains, the importance of relationships, the role of trust and the impact of cultural misunderstandings. We suggest many future research questions to further understand how the supply chain can cause or deter product recalls.


2021 ◽  
pp. 002224292110230
Author(s):  
Sotires Pagiavlas ◽  
Kartik Kalaignanam ◽  
Manpreet Gill ◽  
Paul D. Bliese

The unprecedented number of product recalls in recent years and subsequent low consumer recall compliance raise questions about the role of regulatory agencies in ensuring safety. In this study, the authors develop a conceptual framework to test the impact of a regulator-initiated digital marketing campaign (DMC) on consumer recall compliance. The empirical context is the launch of a nationwide DMC by the U.S. automobile industry’s regulator. The analysis utilizes recall completion data from 296 product recalls active both before and after the DMC’s launch. The results show that the DMC improves consumer recall compliance. In the first four quarters after it was introduced, the DMC increased the number of vehicles fixed, on average, by 20,712 per recall campaign over what was to be expected without the DMC. Regarding boundary conditions, the study finds that the DMC is more effective for recall campaigns with greater media coverage and for those with older recalled products. However, the DMC’s effect is weaker as the time needed to repair a defective component increases. The findings should help regulators make compelling cases for greater resource allocation toward digital initiatives to improve recall compliance.


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