Corporate Social Responsibility and Consumer Choice: Lessons from the Milk Boycott

In Kyung Kim () and Kyoo il Kim ()
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In Kyung Kim: Department of Economics, Sogang University, Seoul 04107, South Korea
Kyoo il Kim: Department of Economics, Michigan State University, East Lansing, Michigan 48824

Management Science, 2025, vol. 71, issue 7, 5625-5644

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 8% or, equivalently, by 8.1 million liters during the 12-month postboycott 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)
Date: 2025
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