Product Recalls and Stock Market Reaction: Empirical Evidence from the Pharmaceutical Industry in the UK And USA
Chieng, Corinne Lin Lin (2005) Product Recalls and Stock Market Reaction: Empirical Evidence from the Pharmaceutical Industry in the UK And USA. [Dissertation (University of Nottingham only)] (Unpublished)
This dissertation attempts to study and understand stock reaction upon product recalls in the United Kingdom (UK) and United States of America (USA) pharmaceutical industry by employing the event study methodology. Drawing on the growing importance and repercussions from product recalls in the pharmaceutical industry on societys wellbeing, the focus of this study intends to ascertain if there were negative stock reactions accompanied by significant abnormal returns upon recall announcements. In addition, this study investigates whether the act of product recall, being a subset of Corporate Social Responsibility (CSR), would significantly affect a CSR advocate comparatively in terms of variation in the degree of stock reaction as compared to a non-CSR advocate in accordance to its inclusion on the FTSE4Good Index and Dow Jones Sustainability Index (DJSI). Finally, the study aims to examine if the dissemination of new information is efficient in the stock market during these announcements.
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