In this paper, we attempt to analyze how the recall types (Voluntary Recallvs. Mandatory Recall) chosen by firms affect the firms’ values in regards tothe implementation of the recall as an important business strategy, and howthe characteristics of firms and(or) defective products affect the firms’ choicesbetween the voluntary and mandatory recall. Based on the results, we derivemanagerial and policy implications. The data on the stock prices of 38recall-related firms with 101 defective products reported between 2000 and2010 are used. For empirical analysis, event study analysis and binary logitmodel are employed.Estimation results show that the voluntary recall has less negative influenceon the abnormal return than the mandatory recall. Also, the higher the hazardlevel, price, and the number of defective products sold, the higher theprobability of a firm choosing the voluntary recall becomes, and the defectiveproducts with the brand name of the firm are more likely to be recalledvoluntarily. This paper is significant in that it is the first study to ourknowledge that empirically analyzes Korean firms’ choices of recall types andtheir effects on the firms’ values.