37 Pages Posted: 9 Jul 2014 Last revised: 26 Apr 2016
Date Written: 2014
This paper explores whether and how social activists’ challenges affect the willingness of politicians’ willingness to associate with targeted firms. We offer the first systematic study of the effect of public protest on corporate political activity, using a unique database that allows us to empirically analyze empirically the impact of social movement boycotts on three proxies for associations with political stakeholders: the proportion of campaign contributions that are rejected, the number of times a firm is invited to give testimony in Congressional congressional hearings, and the number of governmental procurement contracts awarded to a firm. We show that boycotts lead to significant increases in the proportion of refunded contributions, as well as decreases in invited congressional appearances and awarded governmental contracts. These results highlight the importance of considering how a firm’s socio-political environment shapes the receptivity of critical non-market stakeholders. We supplement this primary analysis by drawing from social movement theory to extrapolate and test three key mechanisms that moderate the extent to which movement activists’ challenges effectively disrupt corporate political activity: the media attention a boycott attracts, the political salience of the contested issue, and the status of the targeted firm.
Keywords: nonmarket strategy, boycotts, campaign finance, social movements, organizational theory
JEL Classification: D72, G38, K20
Suggested Citation: Suggested Citation
McDonnell, Mary-Hunter and Werner, Timothy, Blacklisted Businesses: Social Activists' Challenges and the Disruption of Corporate Political Activity (2014). Administrative Science Quarterly, 1-37, 2016, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2454702 or http://dx.doi.org/10.2139/ssrn.2454702