Determining the effectiveness of consumer boycotts: A stock price analysis of their impact on corporate targets

Pruitt, Stephen W.; Friedman, Monroe

doi:10.1007/bf00380573

Cited by 123 publications

(80 citation statements)

References 7 publications

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“…Still, business leaders have been openly concerned about boycotts for several decades: in a 1977 survey, Sentry Insurance Co. found that 51% of senior business managers cited boycotts as their top choice of the "most effective techniques for the consumer movement to use" (Friedman 1999). And rightly so: Pruitt and Friedman (1986) and Davidson et al (1995) found that boycotts led to substantial falls in share prices; Davidson et al also found that about one-third of the 59 firms they studied changed their behavior. For example, after being boycotted for fishing policies that harmed dolphins, Heinz agreed to a dolphin protection plan.…”

Section: Introductionmentioning

confidence: 99%

The Boycott Puzzle: Consumer Motivations for Purchase Sacrifice

2003

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A boycott is never far from a firm's exchanges with its customers. Researchers in marketing need to understand consumer protest behavior, both to aid nongovernmental organizations (NGOs) who wish to organize boycotts, and to assist managers who wish to develop appropriate strategic responses. Boycotts, like many other instances of collective action, are subject to free-rider and small-agent problems: there appears to be little or no motivation for an individual to participate. Yet they assuredly occur. We take an economic and psychological approach to the study of boycotts. Our approach is to develop a typology of motivations for consumer boycotts, to embed these motivations explicitly in a dynamic economic model, and thus to offer explanations for the extent of boycott participation.

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Section: Introductionmentioning

confidence: 99%

The Boycott Puzzle: Consumer Motivations for Purchase Sacrifice

2003

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“…Using a large dataset of 342 protest events between 1962 and 1990, they find that on average, the stock returns of companies targeted by protestors are significantly lower than expected, echoing the findings of many similar studies. Pruitt and Friedman (1986) find that boycott announcements significantly lower the stock returns of the targeted companies in the immediate aftermath of the threat. As a result, stock return is also reduced in the longer term.…”

Section: Literature Reviewmentioning

confidence: 90%

“The People Demand Social Justice”A Case Study on the Impact of Protests on Financial Markets

Chernin

Lahav

2014

Accounting, Economics and Law

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In Israel, the summer of 2011 will be remembered as the summer of social protestation. Steadily increasing food prices that showed no sign of abating motivated people across the nation to voice their discontent in massive weekly protests attended by thousands. As the movement gathered momentum and the impacts of the protests increased, it caught the attention of policy makers, food manufacturers, and food channel retailers. In this article, we show how certain important events during this summer negatively affected the price of food retailers' stocks. We also show that a proper response to the events by retailers targeted by the protestors prevented their stock from falling. We show that a proper response of one retailer converted the goal of protestors and increased its market value.

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“…Yet another research stream examines the stock market's reaction to different stakeholder tactics including boycotts (Pruitt & Friedman, 1986;Koku et al, 1997),…”

Section: Literature Reviewmentioning

confidence: 99%

“…The essay concludes with implications for theory and practice. : 1993-2010 A growing body of empirical research has emerged in recent years that examines the relationship between shareholder wealth and stakeholder influence tactics such as boycotts (Pruitt & Friedman, 1986;King, 2008), protests (Epstein & Schnietz, 2002;King & Soule, 2007), letter-writing campaigns (Smith & Cooper-Martin, 1997), divestitures (Davidson, Worrell, & El-Jelly, 1995), and shareholder (proxy) resolutions (Reid & Toffel, 2009;Doh, Howton, Howton, & Siegel, 2010). Yet scholars have devoted scarce attention to empirically measuring the stock market's reaction to stakeholder-initiated civil lawsuits.…”

Section: Essay 1 -Transnational Legal Activism: a New Form Of Politicmentioning

confidence: 99%

“…Researchers have also analyzed the shareholder wealth implications of common stakeholder tactics such as boycotts (Pruitt & Friedman, 1986;King, 2008), protests (Epstein & Schnietz, 2002;King & Soule, 2007), letter-writing campaigns (Smith & Cooper-Martin, 1997), divestitures (Davidson, Worrell, & El-Jelly, 1995), and proxy resolutions (Reid & Toffel, 2009;Doh et al, 2010).…”

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confidence: 99%

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Secondary Stakeholders as Agents of Influence: Three Essays on Political Risk, Reputation and Multinational Performance

Wernick¹

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Determining the effectiveness of consumer boycotts: A stock price analysis of their impact on corporate targets

Cited by 123 publications

References 7 publications

The Boycott Puzzle: Consumer Motivations for Purchase Sacrifice

The Boycott Puzzle: Consumer Motivations for Purchase Sacrifice

“The People Demand Social Justice”A Case Study on the Impact of Protests on Financial Markets

Secondary Stakeholders as Agents of Influence: Three Essays on Political Risk, Reputation and Multinational Performance

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