About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

9 J. Consumer Pol'y 375 (1986)
Determining the Effectiveness of Consumer Boycotts: A Stock Price Analysis of Their Impact on Corporate Targets

handle is hein.journals/jrncpy9 and id is 375 raw text is: Articles Stephen W. Pruitt and Monroe Friedman Determining the Effectiveness of Consumer Boycotts: A Stock Price Analysis of Their Impact on Corporate Targets ABSTRACT. This research study employs a time-series methodology in an effort to assess the impact of 21 consumer boycott announcements upon the wealth of stockholders of target firms. A major finding of the study was that consumer boycott announcements were followed by statistically significant decreases in stock prices for the target firms. In addition, the overall market value of the target firms dropped by an average of more than $120 million over the two-month post-announcement period. A series of multiple regres- sion analyses employing dummy variables representing identifiable boycott attributes failed to identify any significant relationships between the level of equity damage inflicted upon the boycott targets and the selected variables. Policy implications of the research findings are drawn for corporate managers as well as boycott leaders. Scholarly studies of organized protests, such as boycotts, have typically relied upon qualitative data to determine the effectiveness of the group efforts. To illustrate, Friedman (1985) recently presented the findings of a descriptive study of consumer boycotts occurring in the United States in the 1970s. This study, which examined 90 separate consumer boycotts from both contemporary and historical perspectives, drew heavily upon qualitative evidence, such as statements by the boycott principals, to determine the success rate of the boycotts. Using this evidence, Friedman found that only 24 of the 90 boycott actions (26.7 percent) were success- ful or partially successful in attaining the consequences desired by the boycotting group. The purpose of this study is to advance understanding of the effective- ness or success rates of consumer boycott actions by examining the stock market price patterns for boycotted companies before and after the initial announcements of the boycotts. The study examines those boycotts in the original Friedman investigation which were directed at firms listed on the major stock exchanges. While, as indicated, claims of success by boycotting groups may be suspect, so may claims of failure by target corporations since they are likely to have a vested interest in understating the effectiveness of consumer boycotts. Stock price changes for target firms offer a measure of boycott success without these potential sources of bias. By their buying and selling Journal of Consumer Policy 9 (1986) 375-387. © 1986 by D. Reidel Publishing Company.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most