No long-term consequences for social irresponsibility? Adidas’ rent incident during the COVID-19 pandemic in Germany

Abstract

ABSTRACT Research question How does corporate social irresponsibility affect a brand during a worldwide health crisis? This study investigates how Adidas’ announcement to withhold rent payments in Germany and the ensuing public criticism impacted its brand metrics. Research methods Nationally representative survey data on sentiment, reputation, purchase intent, and behavior for five major sporting goods manufacturers spanning 1,096 continuous days is combined with Google Trends and stock price data to estimate the causal impact of Adidas’ social irresponsibility using a series of Bayesian structural time-series models. Results and findings Adidas took a significant initial hit in sentiment and reputation immediately and months after the scandal. However, purchase intentions, consumer behavior, and stock prices indicate that the company continued to be a preferred brand. Implications Findings suggest that the pandemic affected the outcome of Adidas’ behavior in two ways. While the initial impact was likely amplified by the heightened public attention to corporate behavior during the crisis, lower-funnel and long-term effects might have been mitigated by the rapid development of the pandemic that caused public attention to shift.