Into the Dark: Shifts in Corporate Political Strategy after a Reputational Threat

We examine how firms alter their non-market strategies in the wake of a reputational threat.  Using a unique database on social movement boycotts of corporations, we explore how targeted firms change their political activity after being publicly protested.  We show that boycotts lead to significant reductions in the amount of targets’ political action committee campaign contributions and simultaneous increases in targets’ CEOs’ personal campaign contributions, as well as targets’ lobbying expenditures.  We argue that these represent a shift toward more covert forms of political engagement that present new problems for activists and shareholders seeking to monitor corporate political activity.