Corporate lobbying and product recalls: an investigation in the U.S. medical device industry

Verdiana Giannetti () and Raji Srinivasan ()
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Verdiana Giannetti: Leeds University Business School, Marketing Department, University of Leeds
Raji Srinivasan: McCombs School of Business, University of Texas at Austin

Journal of the Academy of Marketing Science, 2022, vol. 50, issue 5, No 3, 960 pages

Abstract: Abstract While corporate political activity is increasing, its effects on firms’ marketing-relevant outcomes have been largely overlooked in the literature. We propose that corporate lobbying will decrease a firm’s emphasis on product safety and, in turn, increase its product recalls. We further propose that the positive indirect effect of corporate lobbying on a firm’s product recalls via lower emphasis on product safety will be moderated by the firm’s (a) CEO’s functional background and (b) focus on radical (vs. incremental) innovation. We provide empirical support for the proposed model using data on 86 U.S. medical device firms from 2005–2018. The findings extend the literature on the effects of non-market forces on firms’ marketing-relevant outcomes. They also extend the literature on the antecedents of product recalls, which has, hitherto, overlooked the role of non-market forces. The findings on the moderating roles of the firm’s marketing CEO and focus on radical (vs. incremental) innovation generate actionable managerial implications.

Keywords: Corporate lobbying; Product safety; Product recalls; CEO; New products; Medical devices (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11747-022-00860-z

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