Social Media and Digital Collaboration

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Paper Number

1159

Paper Type

Completed

Description

Social media has become a vital platform for voicing product-related experiences that may not only reveal product defects but also impose pressure on firms to act more promptly than before. This study scrutinizes the rarely-studied relationship between these voices and the speed of product recalls in the context of the pharmaceutical industry. Using drug enforcement reports and social media data, we investigate whether social media can accelerate the product recall process in the context of drug recalls. Results based on discrete-time survival analyses suggest that more adverse drug reaction (ADR) discussions on social media lead to a shorter time to recall. We propose the information effect and the publicity effect to better understand the underlying mechanism. Estimation results from two mechanism tests support the existence of these conceptualized channels. This study offers new insights for firms and policymakers concerning the power of social media and its influence on product recalls.

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Dec 12th, 12:00 AM

Does Social Media Accelerate Product Recalls? Evidence from the Pharmaceutical Industry

Social media has become a vital platform for voicing product-related experiences that may not only reveal product defects but also impose pressure on firms to act more promptly than before. This study scrutinizes the rarely-studied relationship between these voices and the speed of product recalls in the context of the pharmaceutical industry. Using drug enforcement reports and social media data, we investigate whether social media can accelerate the product recall process in the context of drug recalls. Results based on discrete-time survival analyses suggest that more adverse drug reaction (ADR) discussions on social media lead to a shorter time to recall. We propose the information effect and the publicity effect to better understand the underlying mechanism. Estimation results from two mechanism tests support the existence of these conceptualized channels. This study offers new insights for firms and policymakers concerning the power of social media and its influence on product recalls.

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