Blacklisted Benefactors: The Political Contestation of Non-Market Strategy

This paper explores whether and how contentious stakeholders can disrupt a firm’s non-market strategy. We offer the first systematic study of the effect of public protest on corporate political activity, using a unique database that allows us to empirically analyze the impact of social movement boycotts on targeted firms’ campaign contributions. We show that boycotts lead to significant reductions in the amount of targets’ campaign contributions and increase the proportion of contributions that politicians refund. These results highlight the importance of considering how a firm’s socio-political environment shapes its non-market strategy. We supplement this primary analysis by drawing from social movement theory to extrapolate and test a number of mechanisms that moderate the extent to which movement challenges effectively disrupt corporate political activity.