Woke or Broke? The Impact of Corporate Activism on Consumer Spending and Product Sales

Abstract

This paper examines the effect of corporate activism on consumer spending and product sales. Using granular household-level spending and product-level sales, we find that consumers react more favorably when a corporate political activism campaign aligns with their political views than when it opposes their views. Similarly, products from firms engaging in corporate activism generate higher sales in regions whose political views align with the activism. This result cannot be explained by other observed consumer or product characteristics or price changes. Our findings suggest that corporate activism can impact the composition of consumers.

Keywords: Corporate activism, ESG, household consumption, political beliefs

JEL Classification: D12, G32, L21, M14