Blacklisted Businesses: Social Activists’ Challenges and the Disruption of Corporate Political Activity

Source: Mary-Hunter McDonnell, Timothy Werner, Administrative Science Quarterly, vol. 61 no. 4, December 2016
(subscription required)

From the abstract:
This paper explores whether and how social activists’ challenges affect politicians’ willingness to associate with targeted firms. We study the effect of public protest on corporate political activity using a unique database that allows us to 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 hearings, and the number of government 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 government contracts. These results highlight the importance of considering how a firm’s sociopolitical environment shapes the receptivity of critical non-market stakeholders. We supplement this analysis by drawing from social movement theory to extrapolate and test three key mechanisms that moderate the extent to which 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.