Hur reagerar investerare på nyheter omproduktåterkallelse inom bilindustrin?
En eventstudie på bilindustrins aktörer

Translated title of the thesis: How do investors react to news of product recall in the automotive industry? An event study onautomotive industry actors
  • Jens Hellberg
  • Lukas Olsson

    Student thesis: Bachelor

    Abstract

    As the technology in newly manufactured cars becomes more advanced, the number of product recallsin the automotive industry is also increasing due to defective components. A product recall gives rise toan increase in costs for the company concerned and should therefore have a negative effect on the shareprice when market participants consult the information. It is common in the automotive industry for carmanufacturing companies to outsource the production of vehicle components. The escalating outsourcingraises the question of which party should be responsible for the costs of the recall. The study examineswith the help of event studies and hypothesis tests how the different actors in the production stage areaffected by information about a recall in the automotive industry? The study has selected 39 events whena car manufacturing company is forced to recall car models. The results of the paper showed that thevarious operators of the production stage are not affected by information about a recall, so it was notpossible to demonstrate that component manufacturers are hit harder than car manufacturers by a recall.Furthermore, the results of the study did not show a positive relationship between the market reaction dueto the size of the recall, the cause of the withdrawal or the time of the announcement.

    Date of Award2020-Jul-02
    Original languageSwedish
    SupervisorEmil Numminen (Supervisor) & Martin Abrahamson (Examiner)

    Educational program

    • Degree of Bachelor of Science in Business and Economics

    University credits

    • 15 HE credits

    Swedish Standard Keywords

    • Business Administration (50202)

    Keywords

    • capital market reactions
    • product recall
    • event study
    • automotive industry
    • component manufacturers
    • contract theory

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