Country of Origin, Product Recalls, and Firm Value
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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.
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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.
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“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.
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“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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