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Does corporate sociopolitical activism oriented market exits benefit corporate brand equity and firm profitability: Evidence from corporate exodus from Russia amidst the 2022 Russo-Ukrainian War = 以企業社會政治行動主義為導向的市場退出是否有益於品牌資產與企業盈利能力: 以2022年俄烏戰爭期間俄羅斯企業外流為背景的實驗研究
Principal Investigator
Department
Grant Awarding Body
Research Grants Council
Grant Type
Faculty Development Scheme
Project Code
UGC/FDS15/B02/23
Amount Awarded
HK$625,700
Funding Year
2023-2024
Duration of the Project
24 months
Status
Ongoing
Abstract
With the rise of political consumerism, consumers and other stakeholders often assert pressures on firms to voice their stance on sociopolitical issues (Jungblut & Johnen, 2021). In response to these pressures, multinational corporations (MNCs) have been increasingly engaging in corporate social activism (CSA), which refers to a public statement or action taken by a firm to express its support for or opposition to a sociopolitical issue (Bhagwat et al., 2020).
In the recent Russo–Ukrainian War, various MNCs (e.g., Apple, Nike and McDonald’s.) announced their withdrawal from the Russian market to demonstrate the stance against the war. These CSA-oriented market-exit decisions are substantially different from the traditional view of market exits with the economic logic of abandoning underperformed markets (Karakaya, 2000). Firms engaging in CSA can satisfy target stakeholders, which may benefit the corporate brand. Nevertheless, market exits implicate resources and cost commitments, making the financial return of the CSA-oriented market exits questionable.
Taking the MNCs’ market exit from Russia amidst the 2022 Russo–Ukrainian War as the research context, this project aims at exploring whether a CSA-driven market exit benefits firm performance in terms of (a) corporate brand equity and (b) profitability. This project will conduct a natural experiment to examine the treatment effect of CSA-oriented market exits on corporate brand equity and profitability. The analysis aims to quantify the impacts of CSA- oriented market exits by capturing significant abnormal changes in corporate brand equity and profitability after the decisions were made.
In addition, this project explores the factors that affect the benefits of CSA-oriented market exits. Through the theoretical lens of instrumental stakeholder theory, this project will examine the moderating roles of target market structure and media reaction in the abnormal performance changes caused by CSA-oriented market exits.
The outcome of this project is expected to provide theoretical contributions. Specifically, this project can contribute to the CSA literature by providing empirical evidence concerning the long-term impacts of CSA on brand and profit performance of firms. Furthermore, this project will provide evidence to demonstrate the importance of major markets’ support and positive media reaction to the benefits of engaging in CSA. In addition, this project can also enrich the literature on market exits by incorporating the lens of CSA in investigating the impacts of market exits.
Practically, this project will provide references for MNCs deeply involved in global markets in terms of how CSA-oriented market exits may affect their brands and profits. This project will also provide guidance on managing market exits in a more effective manner in the current international markets involving complex sociopolitical issues. The project outcomes can also inform governments of the quantitative effects of CSA-oriented market exits and the potential impacts on the economy, which can be important references for future policy making.
In the recent Russo–Ukrainian War, various MNCs (e.g., Apple, Nike and McDonald’s.) announced their withdrawal from the Russian market to demonstrate the stance against the war. These CSA-oriented market-exit decisions are substantially different from the traditional view of market exits with the economic logic of abandoning underperformed markets (Karakaya, 2000). Firms engaging in CSA can satisfy target stakeholders, which may benefit the corporate brand. Nevertheless, market exits implicate resources and cost commitments, making the financial return of the CSA-oriented market exits questionable.
Taking the MNCs’ market exit from Russia amidst the 2022 Russo–Ukrainian War as the research context, this project aims at exploring whether a CSA-driven market exit benefits firm performance in terms of (a) corporate brand equity and (b) profitability. This project will conduct a natural experiment to examine the treatment effect of CSA-oriented market exits on corporate brand equity and profitability. The analysis aims to quantify the impacts of CSA- oriented market exits by capturing significant abnormal changes in corporate brand equity and profitability after the decisions were made.
In addition, this project explores the factors that affect the benefits of CSA-oriented market exits. Through the theoretical lens of instrumental stakeholder theory, this project will examine the moderating roles of target market structure and media reaction in the abnormal performance changes caused by CSA-oriented market exits.
The outcome of this project is expected to provide theoretical contributions. Specifically, this project can contribute to the CSA literature by providing empirical evidence concerning the long-term impacts of CSA on brand and profit performance of firms. Furthermore, this project will provide evidence to demonstrate the importance of major markets’ support and positive media reaction to the benefits of engaging in CSA. In addition, this project can also enrich the literature on market exits by incorporating the lens of CSA in investigating the impacts of market exits.
Practically, this project will provide references for MNCs deeply involved in global markets in terms of how CSA-oriented market exits may affect their brands and profits. This project will also provide guidance on managing market exits in a more effective manner in the current international markets involving complex sociopolitical issues. The project outcomes can also inform governments of the quantitative effects of CSA-oriented market exits and the potential impacts on the economy, which can be important references for future policy making.