Corporate social responsibility and consumer choice: Lessons from the milk boycott

In Kyung Kim () and Kyoo il Kim ()
Additional contact information
In Kyung Kim: Department of Economics, Sogang University, Seoul, Korea
Kyoo il Kim: Department of Economics, Michigan State University

No 2401, Working Papers from Nam Duck-Woo Economic Research Institute, Sogang University (Former Research Institute for Market Economy)

Abstract: We study the impact of a boycott on one of the largest Korean dairy producers, triggered by the exposure of the firm’s unethical management practices, on sales of its own and others. We find empirical evidence that the boycott had substantial and long-lasting consequences. First, consumer utility from the boycotted products decreased significantly, reflecting consumers’ strong willingness to take part in collective action. Second, our discrete choice demand model, which addresses both price endogeneity and product substitution, estimates that sales of the boycotted firm decreased by almost eight percent, or equivalently by 8.1 million liters during the 12-month post-boycott period. Third, the boycotted firm’s sales and revenue decreases would have been more severe had the firm not cut prices after the boycott outbreak. Our findings emphasize top-level managers’ role in fostering an ethical organizational culture within the firm and taking proper and timely countermeasures to curb losses incurred by a boycott.

Keywords: boycott; CSR; discrete choice demand; milk (search for similar items in EconPapers)
JEL-codes: D12 L66 M14 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2024
New Economics Papers: this item is included in nep-agr, nep-dcm, nep-ind and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://zrr.kr/YDxN First version, 2024 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sgo:wpaper:2401

Access Statistics for this paper

More papers in Working Papers from Nam Duck-Woo Economic Research Institute, Sogang University (Former Research Institute for Market Economy) Contact information at EDIRC.
Bibliographic data for series maintained by Jung Hur ().