Counter-Activism Against Ideological Opponents: Evidence Based on the Competitive Dynamics of Corporate Engagement in Advocacy Giving

Abstract

A growing body of literature has sought to understand the strategic drivers of corporate activism, emphasizing the ideological composition of a firm’s workforce as its salient internal driver. Despite these advancements, however, the heterogeneity in its effect remains underexplored, leaving it unclear when employee ideology is more likely to translate into activism. We address this gap by considering competitors’ actions—another important driver uncovered in the scholarship—as a key source of heterogeneity. We examine how these actions can shape the external context in which a firm’s employees evaluate the value of its activism, thereby influencing the firm’s incentives to act on employees' preferences. Our central conjecture is that activism by so-called ideological opponents of a firm’s employee base will be a particularly strong driver of its own activism. This is because actions taken by competitors who hold stances opposite to those valued by a firm’s employees can create a temporal window during which the firm can gain enough employee appreciation for its activism—particularly counter-activism opposing the stance of the competitor. Leveraging the donation records of corporate foundations to advocacy nonprofits as a novel channel for studying corporate activism, we find support for this conjecture. Consistent with our theory, we further find that this effect is driven by firms whose employees hold homogeneous ideological preferences and arises primarily around issues with strong ideological contention.