Regulating Product Recall Compliance in the Digital Age: Evidence from the 'Safe Car Save Lives' Campaign

Journal of Marketing, Forthcoming

64 Pages Posted: 25 May 2021 Last revised: 15 Jul 2021

See all articles by Sotires Pagiavlas

Sotires Pagiavlas

The Pennsylvania State University

Kartik Kalaignanam

Moore School of Business (University of South Carolina)

Manpreet Gill

University of South Carolina - Department of Marketing

Paul D. Bliese

University of South Carolina - Darla Moore School of Business

Date Written: May 24, 2021

Abstract

The unprecedented number of product recalls in recent years and subsequent low consumer recall compliance raise questions about the role of regulatory agencies in ensuring safety. In this study, the authors develop a conceptual framework to test the impact of a regulator-initiated digital marketing campaign (DMC) on consumer recall compliance. The empirical context is the launch of a nationwide DMC by the U.S. automobile industry’s regulator. The analysis utilizes recall completion data from 296 product recalls active both before and after the DMC’s launch. The results show that the DMC improves consumer recall compliance. In the first four quarters after it was introduced, the DMC increased the number of vehicles fixed, on average, by 20,712 per recall campaign over what was to be expected without the DMC. Regarding boundary conditions, the study finds that the DMC is more effective for recall campaigns with greater media coverage and for those with older recalled products. However, the DMC’s effect is weaker as the time needed to repair a defective component increases. The findings should help regulators make compelling cases for greater resource allocation toward digital initiatives to improve recall compliance.



Keywords: Regulation, Product Recalls, Digital Marketing Campaign, Public Policy, Natural Experiment

Suggested Citation

Pagiavlas, Sotires and Kalaignanam, Kartik and Gill, Manpreet and Bliese, Paul D., Regulating Product Recall Compliance in the Digital Age: Evidence from the 'Safe Car Save Lives' Campaign (May 24, 2021). Journal of Marketing, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3852405

Sotires Pagiavlas

The Pennsylvania State University ( email )

210 Business Building
University Park, PA Pennsylvania 16802
United States

HOME PAGE: http://https://directory.smeal.psu.edu/spp5669

Kartik Kalaignanam (Contact Author)

Moore School of Business (University of South Carolina) ( email )

1014 Greene Street
Columbia, SC 29208
United States

Manpreet Gill

University of South Carolina - Department of Marketing ( email )

United States

HOME PAGE: http://https://sc.edu/study/colleges_schools/moore/directory/Gill_Manpreet.php

Paul D. Bliese

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States

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