The Impact Of Consumer Boycotts On The Stock Prices Of Target Firms

Abstract

This research study employs a standard event-time methodology in an effort to assess the impact of consumer boycott initiation and termination announcements upon the wealth of stockholders of target firms. A major finding of the study is that consumer boycott announcements are followed by statistically significant decreases in the stock prices of the target firms. The results of the study also suggest that boycott termination announcements are associated with statistically significant wealth increases for these same firms. Policy implications of the finds are drawn for corporate financial managers.

Trump’s wall and gourmet coffee sales: The effect of a consumer boycott in Mexico

“…Those studies can be organized according to the context of the boycotts: pre‐Internet, pre‐social media, and the age of social media. Two studies (Pruitt & Friedman, 1986; White & Kare, 1990) analyze multiple pre‐Internet consumer boycotts simultaneously using stock prices of the target companies. The remaining twelve studies analyze nine separate boycotts using indicators of sales as the outcome of interest.…”