Abstract
The impact of actual boycotts and threats of boycott on the value of target firms was analyzed using the event study methodology. The results are counter-intuitive. The value of target firms increased, on average, by 0.76% on the day that news of the boycott became public. On the other hand, the value of the target firms increased by only 0.55% on the day that information of the threat of boycott became public. However, there is no significant statistical difference between the market's reaction to actual boycott and threats of boycott. When combined, without distinction between actual boycotts and threats of boycott, the value of target firms increased, on average, by 0.66%. The results also show that the market does not react differently to whether boycotts/threats are union sponsored or non-union sponsored.
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