On the effectiveness of consumer boycotts organized through the internet: the market model

Abstract

Purpose The purpose of this study is to examine the effectiveness of consumer boycotts, which have been launched by individuals using the internet, in inflicting economic harm on the targeted firms. Design/methodology/approach The paper uses the event study technique to analyze the market's response to consumer boycotts launched by individuals using the internet. Findings The results show that consumer boycotts launched by individuals on the internet are ineffective in inflicting economic harm on the targeted firm. Research limitations/implications Despites the buzz about the “dark side” of marketing using the internet, the stock market does not react significantly to boycotts launched by individuals using the internet. However, the small sample size of 63 events tampers the temptation to generalize the findings. Future studies can be conducted with a larger sample size with a different time horizon for a deeper understanding. Practical implications In spite of the findings of this study, managers should still monitor how consumers use the internet to mobilize others against an organization as such consumer actions can affect a firm's reputation negatively. Originality/value The study contributes to the boycott literature and furthers the understanding on the effectiveness/ineffectiveness of the internet as a boycott tool that is intended to inflict economic harm on the targeted firm.