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100			_aSingh, Jagandeep _931317
245			_aImpact of Automobile Recalls on Stock Prices: A Study in the Indian Context
300			_a407-423 P.
520			_aNot so long ago, ‘product recalls’ in the Indian automobile sector were a novelty. The defective vehicles were repaired as part of the after-sales service. In the absence of a strong regulatory framework, the manufacturers were under no obligation to proactively initiate product recalls. The introduction of a voluntary code on product recalls by the Society of Indian Automobile Manufacturers (SIAM) in 2012 and introduction/amendments in the existing legal regimen of the country in recent years have led companies to take more than just baby steps towards product recalls. Product recalls are a case of management failure. There is a need for gauging the impact of this failure on the stock price of the manufacturers, especially in the Indian context where the recall phenomenon is poised to gain further momentum. The event study methodology is a widely used approach to assess the impact of a particular event/announcement on the stock price. This methodology was used in the present study to gauge whether abnormal stock returns accrued to the manufacturers during 13 product recall announcements made in the Indian automobile sector between 1 January 2010 and 31 December 2015. The study found that product recall announcements generated small and statistically insignificant cumulative abnormal returns (CAR) of –0.02 per cent in the (–1, +1) event window, 0.92 per cent in the (–2, +2) event window and 1.70 per cent in the (–5, +5) event window. The study found no substantial or statistically significant difference in the CAR generated during big recalls and small recalls. Furthermore, the study found little evidence that CAR generated during recalls where defective component(s) in the vehicle were repaired is positive as compared to CAR generated when such component(s) were replaced.
653			_aAutomobile recalls in India
653			_aevent study methodology,
653			_aproduct recalls
653			_aIndian automobile industry
653			_a,cumulative abnormal returns
773	0		_029349 _970279 _aBANIK, ARINDAM _dNEW DELHI SAGE PUBLISHING PVT. LTD. _o5558624 _tGLOBAL BUSINESS REVIEW _x0972-1509
942			_2ddc _cJA-ARTICLE