Consumer Boycotts, Country of Origin, and Product Competition: Evidence from China’s Automobile Market

Qi Sun (), Fang Wu (), Shanjun Li () and Rajdeep Grewal ()
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Qi Sun: College of Business, Shanghai University of Finance and Economics, Shanghai 200433, China
Fang Wu: College of Business, Shanghai University of Finance and Economics, Shanghai 200433, China
Shanjun Li: Charles H. Dyson School of Applied Economics and Management, Cornell University, Ithaca, New York 14850; National Bureau of Economic Research, Cambridge, Massachusetts 02138
Rajdeep Grewal: Kenan-Flagler Business School, University of North Carolina at Chapel Hill, Chapel Hill, North Carolina 27599

Management Science, 2021, vol. 67, issue 9, 5857-5877

Abstract: Triggered by a territorial dispute as well as historical animosity, a nationwide civilian boycott of Japanese products took place in China in the summer of 2012. Using detailed data on vehicle sales in four major Chinese cities (Beijing, Tianjin, Shanghai, and Nanjing), this study investigates the impact of boycotts on sales and advertising effectiveness of products from different countries of origin. The boycott dramatically reduced the market share of Japanese brands and benefitted Chinese and non-Japanese foreign brands. Consumer switching to other brands accounted for the majority of the loss in sales. Advertising became less effective for Japanese brands during the boycott but more effective for non-Japanese brands, especially at the parent-brand level (e.g., Toyota) than sub-brand level (e.g., Camry). The sales impacts were strongest in Nanjing, the city that had the most atrocious war experience with Japan during the Battle of Nanjing in 1937, and weakest in Beijing, where local government agencies explicitly discouraged public demonstrations. Finally, although the decline in sales of Japanese brands did not vary by quality or production location, competing non-Japanese brands that were had better quality or were manufactured locally benefitted more.

Keywords: advertising; animosity; automobile; before–after research design; boycott; country of origin (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (7)

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