The Impact Of Product Safety Incidents On Enterprsie And Supply Chain Performance

In recent years, product safety incidents are not uncommon. In particular, the food industry and drug industry product safety incidents, can always cause social concern. Food and drug are needed for the survival of necessity, and its quality of products to consumers’ health problems, are more likely to affect the consumer’s life safety. The food and drug industry because of its products in storage and transportation demand is higher and the information asymmetry between upstream and downstream, so the lack of corporate social responsibility in the supply chain is likely to cause product safety issues. Moreover, in the product safety event, the impact can be transmitted to the relevant enterprises through the supply chain. Product safety incidents not only affect the health of consumers, but also influence the reputation and performance of related enterprises. Since product safety incidents have such a bad impact, but why also often happen? Enterprises are always chasing profit. This paper will study the impact of product safety incident to enterprises and supply chain enterprises performance. Through effective quantification of the impact of the incident, to provide an objective data for the enterprise managers, so that enterprises have the power to improve product safety and quality so as to solve product safety problems.This paper collected the 2003-2015 food industry and drug industry product safety incident. Selected 104 events and 74 events respectively, for short-term and long-term event study. Long-term events window selection for 1 year. Through short-term and longterm event studies found that food industry and drug industry product safety incidents is significantly negative impact on enterprise performance(cumulative abnormal return is negative and significant). In the short term, the stock price of BHARs decreases continuously, and has been significantly. As time goes by, the BHARs will slowly increase and the significance will weaken. Through the in-depth excavation of the event report, this paper will be divided into the event by the event of exposure channels, event processing methods and events of the industry and conduct research.From the perspective of supply chain, this paper extends the upstream and downstream of the event initiation enterprise. Finally, we found a total of 48 upstream and 73 downstream samples, a total of 225 supply chain enterprises samples. Through the study, it is found that product safety incident to the entire supply chain is significant negative impact, the performance of downstream enterprises is significant negative impact on the disclosure of the incident, while the upstream enterprise performance basically does not affect. From the cumulative abnormal return(CAR), the influence of starting enterprises is the largest, followed by the downstream enterprises, the minimum impact of upstream enterprises.