
234 ◾ John Z. Ni, Barbara B. Flynn, and F. Robert Jacobs
For toys with a Class A hazard, investors punish toy companies with lower growth
potential more than those with higher growth potential. On the other hand, when
there is a recall announcement for a toy with a Class B or C hazard, toy companies
with higher growth potential experience a more negative stock market reaction
than do their competitors with lower growth potential. is suggests that investors
are more forgiving when a toy company with higher growth potential issues a recall
announcement for a toy with a severe hazard than they are with a company with
lower growth potential.
e est ...