Hazard severity and time to recall: evidence from the toy industry
organizational crisis, product recall, time-to-recall, hazard severity, design defects, recall experience
The time a firm takes to recall products that pose severe hazards has serious implications for the firm and its stakeholders. We examine the role of hazard severity and investigate how it influences the impact of recall experience, type of product defect, and product price on time to recall. Operationalizing time-to-recall as the number of days that elapsed from the time a product was first sold in the market to the date it was recalled, we test our hypotheses using data on 833 toy recalls issued by 445 firms in the U.S. during 1988-2018. We find that, under conditions of high hazard severity, time to recall is longer for (i) firms with past recall experience, (ii) recalls of products involving design defects, and (iii) recalls of high-priced products. We discuss the implications of our findings for research and practice.
Muralidharan, E., Hora, M., Bapuji, H. (2022). Hazard severity and time to recall-evidence from the toy industry. Journal of Business Research, 139:954-963. https://doi.org/10.1016/j.jbusres.2021.10.035
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