Country of Origin, Product Recalls, and Firm Value

This is a side project from my thesis where I study product recalls of dual-brand products through an Event Study methodology. I found empirical findings on moderators of the recall incidents, particularly the role of having two countries of origin: brand country and country of manufacture. I propose that a product’s country of origin serves as a quality signal and moderates the negative market response after a product recall incident.

The stocks market reacts to higher-quality perception of Country of Origin (COO) by significantly decreasing the negative abnormal returns incurred by the firm during a product recall incident. We find that among the three dimensions of COO, this effect is more cognitive rather than affective or normative.

“The Effect of Country of Origin on the Relationship between Product Recalls and Firm Value” is a paper I am writing and preparing to submit for peer review and publication at the Journal of International Marketing. I am currently incorporating Robinson’s risk-measurement model (2015) in my research to augment some research findings.

“Long-term Effect of Signaling Quality on Firm Value during a Product Recall” is another paper investigating the long-term effect of country of origin on firm value by measuring the idiosyncratic risk associated with the event. In the former event study paper, I probe the immediate window after the incident; and in this paper, I am interested to explore the effects after the shock is settled. I am currently collecting data for the relevant parameters and I target the Journal of International Marketing for publication.

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