Asset Divestment as a Response to Media Attacks in Stigmatized Industries

Rodolphe Durand (durand@hec.fr) and Jean-Philippe Vergne

No 1041, HEC Research Papers Series from HEC Paris

Abstract: In stigmatized industries characterized by social contestation, hostile audiences, and distancing between industry insiders and outsiders, firms facing media attacks follow different strategies from firms in uncontested industries. Because firms avoid publicizing their tainted-sector membership, when threatened, they can respond by divesting assets from that industry. The authors' analyses of the arms industry demonstrate that media attacks on the focal firm and its peers both increase the likelihood of divestment for the focal firm. Specifically, attacks on the focal firm are the most consequential, followed by attacks on peers in the same industry subcategory, and by attacks on peers in different subcategories. These findings shed new light on divestment as a response to media attacks in stigmatized industries and lead the authors to rethink impression management theory.

Keywords: stigma; impression management; divestment; media; categories; reputation; defense industry (search for similar items in EconPapers)
JEL-codes: L14 L60 M10 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2014-03-25
New Economics Papers: this item is included in nep-bec, nep-cul and nep-ind
References: Add references at CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1041

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