The Effect of Online Protests and Firm Responses on Shareholder and Consumer Evaluation

Tijs Broek (), David Langley and Tobias Hornig
Additional contact information
Tijs Broek: University of Twente
David Langley: TNO Netherlands Organization for Applied Scientific Research
Tobias Hornig: Siemens AG

Journal of Business Ethics, 2017, vol. 146, issue 2, No 3, 279-294

Abstract: Abstract Protests that target firms’ socially irresponsible behavior are increasingly organized via digital media. This study uses two methods to investigate the effects that online protests and mitigating firm responses have on shareholders’ and consumers’ evaluation. The first method is a financial analysis that includes an event study which measures the effect of online protests on the target firm’s share price, as well as an investigation of the boundary effects of protest characteristics. The second method is an online experiment that assesses the effect of an online protest campaign on consumers’ perception and purchase intention, as well as any mitigating effects that a firm’s response may have. Contrary to recent studies suggesting that participation in online protests is only token support without any substantive effects, our results show that online protests do hurt. Firms can expect to suffer financial, reputational, and sales damage when an online protest campaign mobilizes consumers successfully. We also show that online protests are more likely to take firms by surprise than offline protests. Firms can exacerbate or reduce the damage by their response. We find that although firms may repair the damage to consumers’ purchase intentions, the negative effects on a brand’s image are harder to rectify. The results have valuable implications for protest organizers and managers faced with the task of responding.

Keywords: Consumer activism; Corporate social responsibility; Response strategies; Stakeholder management; Reputation; Financial impact (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://link.springer.com/10.1007/s10551-017-3653-9 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:jbuset:v:146:y:2017:i:2:d:10.1007_s10551-017-3653-9

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2

DOI: 10.1007/s10551-017-3653-9

Access Statistics for this article

Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman

More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().