Stock Market Reaction to Food Recalls |
| |
Authors: | Victoria Salin & Neal H Hooker |
| |
Institution: | Agricultural Economics Department at Texas A&M University, College Station, Texas,;Department of Agricultural, Environmental and Development Economics at The Ohio State University, Columbus, Ohio |
| |
Abstract: | The costs of food recalls are examined from the perspective of capital markets. A partial event analysis technique is used in this quantitative investigation of firm-specific repercussions of incidents of microbiological contamination of food. These recalls vary by product, company size and scope, and severity. Returns to shareholders fell in some cases, but stock market reaction was not discernible in other incidents. Effects on volatility of returns also are mixed. These findings point out the potentially distinct crisis management tools that would be used for reputation in the stock market versus measures to communicate with the general public. |
| |
Keywords: | |
|
|