Stock market reaction to product-harm crisis response strategies.

Product-harm crises have detrimental effects on firm's sales, reputation, and financial value, requiring crisis managers to promptly adopt appropriate response strategies to mitigate these impacts. Situational Crisis Communication Theory (SCCT) guides managers to align responsibility attribution with response strategies. Using Chinese listed firms' product-harm crises sample from 2015 to 2021, this study analyzes the stock market's reaction to different response strategies. The event study method reveals that a passive strategy is more effective during the disclosure stage, and accept+no recall and deny+recall are conforming strategies during the initial response stage. Additionally, firms with a crisis history should assume greater responsibility when developing response strategies for product-harm crises, as crisis history amplifies negative effects. The results provide recommendations to help managers formulate appropriate strategies.

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Copyright: © 2023 Zheng et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

Déclaration de conflit d'intérêts

The authors have declared that no competing interests exist.