Do Social Movements Influence Firms’ Production Decisions? Evidence from Solar Cell Manufacturers

Abstract

Social movements typically target firms to halt contentious business practices. However, in industries advanced by activists the role of movements is one of facilitators, rather than deterrents, of firms’ strategic commitment. Building on the attention-based view of the firm and on arguments from the framing and political opportunity perspectives of social movement theory, we expose the role of social movements in shaping firms’ production choices in emerging sectors. We theorize a positive link between environmental movement support and firms’ expansion in the solar photovoltaics industry, an industry championed by the environmental movement. Using a unique dataset of European solar cell manufacturers for the period 1988-2008, we find support for this relationship. Moreover, we find that this relationship is stronger in countries that present favorable political opportunities, and for firms with longer tenure in the industry. The implications of these findings are discussed with respect to social movement theory and strategic management.