ABSTRACT 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. (Scott, 1987; The broader literature collectively refers to this tactical repertoire as a firm's non-market strategy. A particularly prolific stream of research in non-market strategy explores corporate political activity, or the pursuit of legislative and regulatory influence through tactics like campaign contributions and lobbying Despite this rich, interdisciplinary attention to corporate political activity, we continue to know little about how a company's reputation affects its ability to engage in political strategy and influence regulatory stakeholders. This theoretical gap is surprising given the intimate role that reputational concerns appear to play in the political process. After all, despite its ubiquity, corporate political activity is a contentious subject that draws widespread media coverage and public opprobrium, especially given steady declines since the 1970s in public approval of the role of business in American politics In this paper, we explore this possibility by employing organizational and social movement theory as a lens to understand the relationship between reputational threats and political activity. We propose that non-market strategy is politically contested, meaning that a firm's non-market strategy can be disrupted when contentious stakeholders question the legitimacy of a firm's practices, policies, or products. To test this general proposition, we offer Blacklisted Benefactors 4 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 through their affiliated political action committees (PACs). Results from our analyses confirm that boycotts lead to significant reductions in the amount of targets' campaign contributions. Moreover, we show that boycotts lead to a significant increase in the proportion of targeted firms' contributions that are refunded, thereby being effectively rejected by the politicians they seek to support. These results highlight the important role that the socio-political environment in which a firm is embedded plays in determining firms' freedom to strategically interact with their regulatory environment. 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 disrupt corporate political activity. Background and Theory: Movements and the Disruption of Non-market Strateg
