Systemic Attribution Explanation for Negative Crisis Spillover

Consumers increasingly rely on online reviews to help them make consumption decisions. Meanwhile, online reviews also facilitate the comparison of product information. Consumers typically pick one from a bunch of similar products by comparing available product information rather than only consider the items they finally purchase. Therefore, the information about one product could affect consumers’ perception of related products, which is known as information spillover. Understanding the spillover effect is significant for businesses to have a full picture of the influence of online reviews. Although recent research has shown significant interest in exploring the spillover effect, especially those from marketing campaigns, little has been known on the spillover effect caused by online reviews. This research aims to study the spillover effect of online WOM among competitive products and the moderating effect of brand strength and brand relationship based on the accessibility-diagnosticity theory. Using the cutting-edge Bayesian dynamic linear model, this empirical analysis disassembles the influence of reviews into a two-stage dynamic process. At the first stage, online reviews of different valence influence consumers’ latent interest in products, which can be seen as online WOM from the perspective of product providers. Consumers’ latent interests in different products influence each other, during which the spillover effect occurs. At the second stage, the change of such latent interests affects the performance of a product in the end. Using the check-in data of the catering industry provided by a location-based service company, this research finds that online reviews have a negative WOM spillover effect among competitive brands. In other words, the increase of online WOM of one product will damage the performance of its competitors. This negative spillover is asymmetric among products with different brand strength. Products with higher brand strength have a larger spillover effect on products with lower brand strength, while they get less affected by other brands. Products sharing the same brand name could generate value transfer and have a positive spillover effect among each other. What’s more, despite of the resistance to the negative spillover from competitive brands, strong brands suffer more loss from their negative WOM. Therefore, it is especially important for them to maintain positive online WOM. This study makes three main theoretical contributions. Firstly, previous studies tend to focus only on the direct effect of online reviews on product performance, while this research discusses its spillover effect based on the accessibility-diagnosticity framework, expanding the perspectives on the effect of online reviews. Secondly, this research emphasizes the important role that brands play in the online environment and provides a new angle to analyze the interaction of traditional business characteristics and the online environment. Although social media has dramatically changed the way how a business reaches its customers, building a strong brand is still crucial to gain competitive advantages. Thirdly, this research examines and discusses how reviews of different valence affect online WOM and how this effect differs among brands, contributing new empirical evidence to the usefulness of online reviews.

Spillover occurs when one environmentally sustainable behavior leads to another, often initiated by a behavior change intervention. A number of studies have investigated positive and negative spillover effects, but empirical evidence is mixed, showing evidence for both positive and negative spillover effects, and lack of spillover altogether. Environmental identity has been identified as an influential factor for spillover effects. Building on identity process theory the current framework proposes that positive, negative, and a lack of spillover are determined by perceived threat of initial behavior and identity process mechanisms evaluating the behavior. It is proposed, that an environmental behavior change intervention may threaten one's existing identities, leading to either (a) integration, (b) compartmentalization, or (c) conflict between one's environmental identity and non-environmental identities. Initial evidence for the proposed framework is based on a field intervention which included a meat reduction programme in a canteen of a medium size private sector company. Semi-structured interviews and an explorative visualization method that aimed at assessing identity change were implemented with thirteen employees (i.e., intervention participants) before and after the intervention. The qualitative data was analyzed by using thematic analysis via NVivo12. Results of the visualization task and interview method provided initial evidence of direct and indirect positive contextual spillover effects, with comparatively less evidence a lack of spillover and a relative absence of reported negative spillover. This paper provides a novel theoretical approach, centered on identity process theory to enhance understanding of positive spillover, negative spillover, and the lack of spillover.

Summary Drawing upon data collected in 37 industries in China between 1998 and 2003, this empirical study examines the degree to which three factors—size of technological gap, absorptive capability, and technological intensiveness—influence a “negative spillover effect” in reaction to foreign direct investment. The results of our study demonstrate that the size of the technological gap between the local industry and the foreign invested companies does not affect the foreign direct investment's capability to produce a “negative spillover effect.” However, there is a significant correlation between each of the other two factors, namely, absorptive capacity and technological intensiveness, and the negative spillover effect. That a large absorptive capacity of local firms in a technologically intensive industry can have a moderating effect on any negative spillover effect is obvious. However, as the absorptive capacity of the local industry and the technological intensiveness of the industry decline, this moderating effect becomes statistically insignificant. This study then demonstrates that the ability for local industries to catch up depends on the domestic firm's participation in the process of technological innovation and improvement. To overcome technological dependence in high‐technology industries, domestic firms have to strengthen their technological absorptive capacity and their own innovative capabilities.

This study investigates whether pro-environmental behaviours (PEBs) in the workplace have a negative cross-contextual spillover effect on PEBs in a hotel context. The latter setting differs due to the privacy and hedonic nature of the hotel context and the disappearance of social pressures from the workplace. Furthermore, the contribution ethic and identity resilience are incorporated into the research framework to understand the negative cross-contextual spillover. The results reveal that workplace PEBs are negatively associated with hotel PEBs, and the negative spillover effect of low-effort workplace PEBs is smaller than that of high-effort workplace PEBs. PEBs in the workplace positively affect the contribution ethic, and the contribution ethic negatively affects PEBs in a hotel context. Notably, high-effort workplace PEBs have a greater positive impact on a person’s contribution ethic than low-effort workplace PEBs. The negative cross-contextual spillover effect is contingent on identity resilience, and identity resilience positively moderates the negative relationships between workplace PEBs, the contribution ethic, and hotel PEBs. The findings offer hospitality scholars and practitioners a deeper insight into consumers’ PEBs in a hotel context and provide guidelines on how to reduce the negative cross-contextual spillovers of PEBs in the workplace.

Effects of online-to-offline spillovers on manufacturers’ online sales mode selection

PurposeConsistent with an “absolute bonding hypothesis,” the benefits of listing on US exchanges experienced by cross-listed firms are accompanied by an increased risk of experiencing a spillover effect due to negative news within their industry. The purpose of this study is to test this form of the bonding hypothesis by analyzing the spillover effect to cross-listed firms when class action lawsuits are filed against their industry peers.Design/methodology/approachThe bonding hypothesis is tested by analyzing the spillover effect to non-sued cross-listed firms of class action lawsuits brought against US domestic firms in the same industry. The spillover effect is identified using cumulative abnormal returns around lawsuit filing dates from 1996 to 2020. A sample of matched non-sued cross-listed and domestic peer firms is evaluated in a cross-sectional analysis to identify country and firm-level characteristics that mitigate the negative spillover effect to cross-listed firms.FindingsWhile US firms realize significantly negative abnormal returns when class action suits are filed against their industry peers, the impact to cross-listed peers is statistically insignificant. In multivariate analyses, we show that the ability of cross-listed firms to avoid this negative spillover effect is stronger for firms with greater profitability that are headquartered in countries with better shareholder protections and governance characteristics.Originality/valueResults suggest that cross-listed firms may have a level of immunization from the negative industry spillover effect of class action lawsuits and, thus, exhibit only “partial bonding” to the US market.

Jurisdictions can engage in different types of aggressive tax policies to varying degrees. These policies can have negative spillover effects on other jurisdictions. In the realm of corporate taxation, these effects consist of base erosion and profit shifting and perceived pressures to reduce corporate taxes. Both direct and indirect effects undermine the efforts especially of developing countries at mobilising domestic resources to achieve the Sustainable Development Goals. We analyse the intensity of corrosive tax policies by exploiting a new legal dataset compiled for the Corporate Tax Haven Index (CTHI). Relying on rigorously defined indicators, the dataset allows comparative analyses of negative and positive spillover pathways in the corporate income tax systems of 64 jurisdictions. Tax policies under review comprise, for example, preferential tax regimes, extremely low tax rates agreed through secretive tax rulings, economic zones and tax holidays. Comparing the 27 European Union (EU) member states with five African developing countries, we find important differences. Except for two indicators (loss utilisation and economic zones/tax holidays), the European Union members are found to consistently engage in more aggressive corporate tax policies than the African countries. These heightened risks for negative spillovers emanating from the EU27 corporate tax rules stand in conflict with the stated intentions by the European Union to support good governance in tax matters and its commitment to ensure policy coherence for development. The chapter provides recommendations on how to reduce the risks for negative spillovers in corporate taxation and to exit the race to the bottom in corporate taxation.

Little is known about how peers influence the impact of incentives. We study how peers’ actions and incentives can lead to peer spillover effects. Using a field experiment on snack choice in the school lunchroom (choice of grapes versus cookies), we randomize who receives incentives, the fraction of peers incentivized, and whether or not it can be observed that peers’ choices are incentivized. We show that, while peers’ actions of picking grapes have a positive spillover effect on children’s take-up of grapes, seeing that peers are incentivized to pick grapes has a negative spillover effect on take-up. When incentivized choices are public, incentivizing all children to pick grapes, relative to incentivizing none, has no statistically significant effect on take-up, as the negative spillover offsets the positive impacts of incentives. (JEL C93, D12, I21, J13)

Agricultural water use efficiency and spatial spillover effect considering undesired output in China

ABSTRACTThis paper investigates the spillover effects of R&D investments made by foreign multinational enterprises (MNEs) and domestic firms on their export activities, using a manufacturing firm-level panel dataset from South Korea. The theoretical framework predicts two conflicting spillover effects: positive technology spillovers and negative market rivalry spillovers. Thus, the net spillover effect is determined by the relative degree of the two conflicting spillovers. The empirical results show that negative intra-industry spillovers exist from the R&D of foreign MNEs on the export performance of firms, which implies that, in general, negative market rivalry spillovers dominate positive technology spillovers. However, notably, in the case of firms equipped with absorptive capacity, the negative spillovers can be alleviated; firms can gain positive spillovers by muting negative ones. Firms without absorptive capacity cannot avoid such negative effects. This paper shows that absorptive capacity is vital in capturing positive spillovers as firms build competency by accumulating their own know-how and improving their ability to capture better external technologies.

Showering is one of the most water-intensive behaviours in urban households, accounting for 20–30% of water use. Real-time feedback from smart devices has been proven to significantly reduce water consumption in showers. Still, it is not known whether these devices have spillover effects on other water use behaviours. For the first time, we provide empirical evidence for a significant and negative within-domain spillover effect from the use of such devices, showing an increase in water use in other activities by 2.5% per day per household. Up to one-third of conservation effects are eroded by such spillovers, resulting in a two steps forward, one step back situation. Overall, however, net water use is still reduced by 4.7% in the 385 households that were observed. This study points out an important behavioural limit on the use of such smart shower devices and suggests that such use be accompanied by informational or other campaigns to reduce the large negative spillovers.

Non-point source pollution from agricultural land use is a significant contributor to environmental pollution, causing serious threats to water, air, and soil quality. Environmental regulations have been shown to have a significant negative effect on pollutant emissions. However, empirical studies examining the impact of agricultural environmental regulations on cultivated land non-point source pollution are limited. To explore the effects of environmental regulations on cultivated land non-point source pollution, this study focuses on the Dongting Lake Plain. Using statistical data from 2010 to 2020, we analyze the temporal and spatial changes in cultivated land non-point source pollution before and after the implementation of the “Zero Growth of Fertilizer and Pesticide Use Action Plan”. A spatial econometric model is used to assess the impact of environmental regulations on pollution. The results indicate that non-point source pollution in the Dongting Lake Plain shows positive global spatial autocorrelation. Locally, in 2010 and 2015, high-high clusters were dominant, while low-low clusters were less common. By 2020, low-low clusters became the main pattern of pollution. The introduction of the Zero Growth Action Plan had a negative impact on pollution intensity within the region and positive spillover effects on neighboring areas. In terms of emission structure, the plan significantly reduced nitrogen emission intensity and pesticide loss, but had a positive impact on phosphorus emissions. The level of regional economic development had a significant negative effect on pollution intensity, while urbanization had a positive effect. Agricultural technological progress showed a negative spatial spillover effect on phosphorus emissions, and regional economic development had a negative spatial spillover effect on nitrogen and pesticide emissions. This study provides evidence of the impact of environmental regulations on cultivated land non-point source pollution and offers valuable insights for the development of future pollution control policies.

Our study examines the spillover effects that arise from foreign and domestic exporting firms on the export decisions of local manufacturing firms in Vietnam between 2010 and 2018. There are positive horizontal spillover effects from both foreign and domestic exporting firms, while negative spillover effects are detected through the backward channel. Domestic exporting firms are found to generate positive forward spillover effects, whereas foreign direct investment exporting firms have negative forward spillover effects. Moreover, we observe opposite spillover effects from foreign and domestic exporting firms on the export exit of domestic firms, with a negative impact under the horizontal channel and a positive impact under the backward channel. Our research also reveals the effects of firms’ characteristics on the export participation and exit of domestic firms. The study suggests that the Vietnamese government should focus on enabling the FDI sector to create positive spillover effects, attracting foreign firms with export potential as well as supporting domestic exporting firms using and providing local intermediate inputs, and improving the technological and absorptive capabilities of domestic firms.

This study advances and tests the notion that the phenomenon of negative spillovers— whereby bystander firms are penalized due to their similarity to perpetrator firms— is shaped by two distinct forms of categorization. We analyze how and why medias’ interpretative process following instances of corporate crisis will likely include not only prototype-based categorization but also goal-based categorization. We highlight the role and relevance of this neglected distinction by extending negative spillover predictions to include two unique predictions based on goal-based categorization. First, we propose an amplifying effect: if the perpetrator firm has political connections, which may trigger media’s goal-based categorization, then that bystander firm will suffer a more significant negative spillover effect. Second, we also posit a mitigating effect: if the bystander firms have political connections, then the negative spillover effect to bystander firms will be lessened. We find support for our hypotheses in analyses of the tenor of media coverage to corporate crisis for all China listed firms. We discuss the implications of our theoretical perspective and empirical findings for research on negative spillovers and political connections.

Social cloud has emerged as a case of sharing economy, where socially connected agents share their computing resources within the community. This paper considers the social cloud as an endogenous resource‐sharing network, where agents are involved in closeness‐based conditional resource sharing. This study focuses on (1) the impact of agents' decisions of link addition and deletion on their own local and global resource availability as well as on others' global resource availability (as spillover effects), (2) the role of agents' closeness in determining spillover effects, (3) agents' link addition behavior, and (4) stability and efficiency of the social cloud. The findings include the following: (i) Agents' decision of link addition (deletion) increases (decreases) their local resource availability. However, these observations do not hold in the case of global resource availability. (ii) In a connected network, agents experience either a positive or a negative spillover effect and there is no case with no spillover effects. Agents observe no spillover effects if and only if the network is disconnected with three or more components. Furthermore, an agent experiences negative spillover if there is no change in its closeness. Although an increase in the closeness of agents is necessary to experience positive spillover effects, the condition is not sufficient. (iii) We study the relation between agents' distance from each other, and their local as well as global resource availabilities. We prove that the local resource availability of an agent from another agent increases with decrease in the distance between them and that maximum local resource availability is obtained from the agent with the least closeness. Using these results, we discuss which agent to add a link to, so as to maximize the local resource availability. We discuss why such results are difficult to establish for global resource availability. However, in a two‐diameter network, we show that for an agent, link formation always increases the global resource availability. (iv) We also study resource‐sharing network formation and its efficiency in a strategic setting. We prove the existence of a pairwise stable network. Furthermore, we provide a set of conditions for a few prominent network structures (star, complete, wheel, and bipartite networks) to be pairwise stable. We show that the “connected in pairs, otherwise disconnected” network is better than a connected network, in terms of social welfare.