ISSUES IN THE USE OF THE EVENT STUDY METHODOLOGY: AN ANALYSIS OF MARKETING STRATEGIES IN PRODUCT RECALL STUDIES

Event study methodology, which relies on market efficiency, investigates stock price changes after  an event. Despite this methodology arises in the finance literature, it found a wide execution area  including the marketing literature. Event study makes it possible to observe the effect of diverse  marketing activities on financial value and is therefore very suitable for understanding marketingfinance  interface. Empirical findings of product recall studies suggest that a product recall cause to  a decrease the firm value. Furthermore, product recall studies adopt event studies that help better  understand the reactions of the investors to different marketing strategies in a crisis context. However,  only limited studies are available in this field. This paper covers (1) an instruction an instruction of  the methodology, (2) a review that highlights the implementations of the method in the marketing  literature, (3) summary of studies that measure the effect of marketing strategies in the product recall  context, and (4) propositions for further empirical testing. We aim to guide further empirical studies.