protests don’t “kill,” they just cause pain


I recently made a first attempt at describing my research to journalists. It’s been an interesting experience trying to translate my research findings to a broader audience. This Reuters blogger’s coverage of a study that Sarah Soule and I did looking at the effect that protests of corporations had on the targets’ stock prices gets it mostly right but the title of the post is over the top. Saying that “newspapers kill stocks” is an exaggeration. Protests covered by the NY Times cause a .4 to 1 percent decline in the expected returns to stock price. On average, returns to stock prices dipped .3 percent during the two-day period of the day before and the day of the protest. That’s not exactly a “kill”; it’s more like a shiv in the side. Given the billions of invested dollars in any given corporation, a protest reported in the NY Times tends to lead to a significant loss of investment capital, sometimes in the millions of dollars.

The actual paper will appear in the September issue of Administrative Science Quarterly (to be in print sometime soon). For now, you can download the paper at my faculty page.

Update: Here’s what happens to the stock price returns of a corporation that has been targetted for protest. The vertical axis in the figure is the percentage change from the expected return. Anything above zero means that the stock price received greater than expected returns and below zero means lower than expected returns. The drop in returns is especially low on the day of the protest (day zero on the x-axis). The figure only presents averages of course. Some protests exhibited no decline in returns and others yielded much steeper declines.

Written by brayden king

October 26, 2007 at 4:49 pm

6 Responses

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  1. Brayden, You’re a rock star. I love this paper.



    October 26, 2007 at 7:56 pm

  2. Tina: Brayden’s more of a rock gawd. It’s a really neat paper and raises lots of great issues.



    October 27, 2007 at 2:55 am

  3. Thanks Tina and Fabio!



    October 29, 2007 at 3:58 pm

  4. […] this blog, we’ve often discussed how movements impact society. Brayden’s recent ASQ paper with Sarah Soule is a great example. It’s an issue motivating my book on black studies as an outcome of the Black Power movement […]


  5. […] Brayden will protest in front of your house, and then measure the effect on your net worth. […]


  6. […] Another study of mine (coauthored with Sarah Soule) shows that protests generate information that people use to evaluate their targets. We show that protests against corporations lead to a .4 to 1% decline in the stock price of that company during a two-day window around the protest.  The result demonstrates that when activists protest, investors listen. The protests are generating some type of information, which likely varies across protests, that makes investors worry about the value of the asset. In some cases, the protest may cause investors to be concerned about the soundness of a particular corporate policy or practice but in other cases they may interpret the protest as a signal that consumers will be unhappy with the company. The point is that the protest generates information and shifts public attention to a problem that prior to the protest was ignored. If it wasn’t being ignored prior to the protest, then the price would never have fluctuated because the information would already be reflected in the stock price. I’ve said more about this paper in a previous post. […]


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