When brand scandal spills over brands from the same region of origin: moderating role of psychic distance

Abstract

Previous studies have documented that brands are vulnerable to negative spillover caused by scandalised brands from the same countries. However, little is known about how individual-level perceived psychic distance (PD) influences the likelihood of spillover occurring. PD refers to individuals' perception of dissimilarities between their home country (or region) and foreign countries (regions). The results from the two experiments indicated that PD improves the likelihood of spillover towards brands from the same region. When PD is high, a brand scandal is more likely to spillover to brands from the same region of origin (ROO) versus those from different ROO. However, when the PD is low, a brand scandal is unlikely to spillover, no matter whether the ROO is the same or not. The results also reveal the moderated mediating role of perceived brand similarity.