Time to Recall and Type of Firm

The moderating effects of Country of Origin on Product Recall.

Abstract

The purpose of this paper is to understand the time what influences the time to recall defective products. Especially, the influence of public firms and perceived country of origin image of manufacturing countries on promptness/delay to recall. The paper collects recall data from Consumer Products Safety Commission database from 2007 to 2018 and The Global Competitiveness Report by the World Economic Forum for the same period. With the application of signalling theory and shareholder/stakeholder perspective, the findings suggest that public firms tend to recall defective products faster in general. Specifically, they recall products fast when the country of origin image is low (perceived positive image of local suppliers’ quality). The findings are empirical in nature and uses single-industry data for a specific period. The article has implications on discussions pertaining to ethical communications, corporate social responsibility and managerial biases of other countries. The paper also discusses future avenue of crises management into service industries and B2B relationship. While previous research has studied antecedents and consequences to product recall from consumer and shareholder perspective, this paper focuses on perceived image of local suppliers on time to recall process of U.S. toy companies dealing with complex global supply chain.

Keywords: product recall, quality of products, institutional environment, U.S. Consumer Product Safety Commission, World Economic Forum

Faculty Mentor: Etayankara Muralidharan

Department: International Business (Honours)