The dynamic interdependencies among the negativity and the positivity in news and user-generated content about safety in a firm's products and the firm's product recalls
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View abstract on PubMed
Summary
This summary is machine-generated.This study reveals how news and user-generated content (UGC) impact product recalls. Negative news reduces recalls, while negative UGC increases them, showing distinct media effects on product safety management.
Area Of Science
- Business
- Marketing
- Communication
Background
- Product safety and recalls are critical for firms.
- Media coverage, both news and user-generated content (UGC), influences public perception and firm actions.
- Understanding the interplay between media sentiment and product recall decisions is crucial for effective risk management.
Purpose Of The Study
- To investigate the asymmetric relationships between sentiment in news and UGC regarding product safety and subsequent product recalls.
- To differentiate the impact of negative and positive sentiment from different media sources on product recall decisions.
- To explore the substitutive or complementary effects of sentiment from news and UGC.
Main Methods
- Utilized a panel vector autoregression (PVAR) model to analyze dynamic interdependencies.
- Examined data on product safety, news sentiment, UGC sentiment, and product recalls.
- Employed statistical analysis to uncover asymmetric associations.
Main Results
- Negative news sentiment correlates negatively with product recalls, while negative UGC sentiment correlates positively.
- Positive news sentiment correlates positively with recalls; positive UGC sentiment has no significant effect.
- Negative sentiments from news and UGC act as substitutes, whereas positive sentiments act as complements in their association with recalls.
- Both negative and positive news sentiment exhibit significant long-term associations with recalls, albeit with different patterns.
Conclusions
- The study highlights the distinct and often opposing roles of news versus UGC sentiment in influencing product recall decisions.
- Managerial strategies for product safety communication should consider the source and valence of media sentiment.
- Findings contribute to understanding earned media's impact on firm decisions in the product market.
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