Trouble in Store: Probes, Protests and Store Openings by Wal-Mart, 1998-2007

American Journal of Sociology, Vol. 116, No. 1, pp. 53-92, 2010

40 Pages Posted: 31 Oct 2011

See all articles by Paul L. Ingram

Paul L. Ingram

Columbia University - Columbia Business School, Management

Qingyuan Yue

University of Texas at Austin - Red McCombs School of Business

Hayagreeva Rao

Stanford Graduate School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: 2010

Abstract

Wal-Mart has increasingly become the target of protests over its scale, manifested as contention over specific expansions. Often, the protests are local and led by local organizations, and as a result, chains face uncertainty whether local activists will organize a protest. We suggest that chain stores respond to this uncertainty through a "test for protest" approach. They use low-cost probes that take the form of proposals to open a store. They then withdraw if they face protests, especially when the contexts of those protests make them more costly, either in terms of legislative barriers, consumer demand, or encouragement of protests elsewhere. Wal-Mart is more likely to open stores that are particularly profitable, even if they are protested, and in such cases, they also make larger donations to community causes. We find broad support for our predictions. Our uncertainty-based account of protests as signals stands in sharp contrast to full-information models which predict that protests should be rare miscalculations.

Suggested Citation

Ingram, Paul L. and Yue, Qingyuan and Rao, Hayagreeva, Trouble in Store: Probes, Protests and Store Openings by Wal-Mart, 1998-2007 (2010). American Journal of Sociology, Vol. 116, No. 1, pp. 53-92, 2010, Available at SSRN: https://ssrn.com/abstract=1951199

Paul L. Ingram (Contact Author)

Columbia University - Columbia Business School, Management ( email )

3022 Broadway
New York, NY 10027
United States

Qingyuan Yue

University of Texas at Austin - Red McCombs School of Business ( email )

Austin, TX 78712
United States

Hayagreeva Rao

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
(650) 724-7708 (Phone)
(650) 725-7979 (Fax)

HOME PAGE: http://faculty-gsb.stanford.edu/rao/contact.html

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