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Stock Market Reaction to Food Recalls


  • Victoria Salin
  • Neal H. Hooker


The costs of food recalls are examined from the perspective of capital markets. A partial event analysis technique is used in this quantitative investigation of firm-specific repercussions of incidents of microbiological contamination of food. These recalls vary by product, company size and scope, and severity. Returns to shareholders fell in some cases, but stock market reaction was not discernible in other incidents. Effects on volatility of returns also are mixed. These findings point out the potentially distinct crisis management tools that would be used for reputation in the stock market versus measures to communicate with the general public.

Suggested Citation

  • Victoria Salin & Neal H. Hooker, 2001. "Stock Market Reaction to Food Recalls," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 23(1), pages 33-46.
  • Handle: RePEc:oup:revage:v:23:y:2001:i:1:p:33-46.

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