Combating Sociopolitical Contagion with Countervailing Claims: Evidence from Charlottesville

Abstract

Prior research suggests that, from a strategic perspective, firms make sociopolitical claims to compensate when their own actions misalign with the sociopolitical preferences of their stakeholders. Drawing on theories of intracategorical contagion, however, I propose conditions under which firms make sociopolitical claims not to compensate for their own actions, but rather to compensate for the actions of others within the broader categories to which they pertain (such as others within their geographic location, industry, etc.). Specifically, I argue that sociopolitical claims serve to remedy excessive misalignment between stakeholders' preferred sociopolitical positions, and the sociopolitical positions these stakeholders would otherwise presume the firm holds based on the actions of other actors within the firm's category. I examine these predictions in the context of the August 2017 Unite the Right rally, in which white supremacist rioters suddenly imbued the Charlottesville, Virginia area with a newfound anti-diversity reputation. I show these events significantly increased employers' use of pro-diversity claims in Charlottesville-area job postings, and that this effect was larger among postings targeting workers with stronger pro-diversity preferences. These empirical findings substantiate my novel theoretical argument that, ceteris paribus, corporate claims to sociopolitical positions are most likely to arise in geographies, industries, and other categories in which audiences least expect these positions to be held.