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| The Impact of Firm’s Response Strategy to ProductHarm Crisis on Stock Market:
MultipleCase Study on Poison Capsule Event |
| PAN Jia，LIU Yi，WANG Liang |
| 1. Xi’an Jiaotong University, Xi’an，China; 2. Shanghai Jiaotong University, Shanghai， China |
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Abstract This study discusses the impact of firm’s response strategy to productharm crisis on stock market, based on 5 publicly traded pharmaceutical firms producing capsules with chromium above standard in Poison capsule event in 2012. Using event study method and multiplecase study method, the results show that: (1) Productharm crisis have a negative effect on firm value generally. (2) Proactive response is an optimal method in protecting firm’s market value. There is no significant difference in market response when firms use passive strategy and defensive strategy. Firm financial value loses most severely when firms response ambiguously.
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Received: 04 December 2012
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2014, Vol. 11 
