Vehicle Manufacturers' Decisions on Recall Timing: a Synthetic Panel Data Model
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This paper focuses on the timing decisions of manufacturers' recall issuance. In particular, it identifies why some manufacturers are slow to issue recalls, while others are quicker. To answer why firms behave differently in responding to recalls, we use the US recall data from year 2008 to year 2017 and synthetic panel regression models. Our estimation results show that voluntary recalls usually have shorter pre-recall periods, while government mandated recalls have much longer pre-recall periods. We also find that vehicle manufacturers make recall issuance decisions based on the degree of risk, expected liability, and recall costs from defective vehicles. Furthermore, manufacturer and vehicle characteristics affect the timing of recall issuance. In particular, Japanese and Korean manufacturers are slow to issue recalls compared to U.S. manufacturers. The pre-recall periods of European manufacturers are not different from those of U.S. manufacturers.
Abstract
This paper focuses on the timing decisions of manufacturers' recall issuance. In particular, it identifies why some manufacturers are slow to issue recalls, while others are quicker. To answer why firms behave differently in responding to recalls, we use the US recall data from year 2008 to year 2017 and synthetic panel regression models. Our estimation results show that voluntary recalls usually have shorter pre-recall periods, while government mandated recalls have much longer pre-recall periods. We also find that vehicle manufacturers make recall issuance decisions based on the degree of risk, expected liability, and recall costs from defective vehicles. Furthermore, manufacturer and vehicle characteristics affect the timing of recall issuance. In particular, Japanese and Korean manufacturers are slow to issue recalls compared to U.S. manufacturers. The pre-recall periods of European manufacturers are not different from those of U.S. manufacturers.
참고문헌 (27)
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