China Product Recalls: What's at Stake and What's Next

20 February 2008
By Lucy P. Allen, et al.

In 2007, a large number of recalled products were connected to Chinese manufacturers. The press dubbed 2007 "the year of China recalls." In this paper, NERA Senior Vice President and Mass Torts and Product Liability Practice Chair Lucy P. Allen and former Senior Consultants Dr. Simona Heumann and Dr. Renzo Comolli investigate the recalls in greater detail, providing statistics on recall types, magnitudes, and country of origin. Their paper analyzes trends in recalls over time, studies recalls by regulatory agencies and describes techniques that can be used to estimate the wide-ranging costs associated with such recalls. The authors present the results of the application of one of these techniques, a simplified event study, to specific recalls in 2007.