Trouble in Store: Probes, Protests and Store Openings by Wal-Mart: 1998-2007Coauthor(s): Lori Qingyuan Yue, Hayagreeva Rao.
Wal-Mart has increasingly become the target of protests over its scale, manifested as contention over specific expansions. Often, the protests are local and led by local organizations, and as a result, chains face uncertainty whether local activists will organize a protest. We suggest that chain stores respond to this uncertainty through a "test for protest" approach. They use low-cost probes that take the form of proposals to open a store. They then withdraw if they face protests, especially when the contexts of those protests make them more costly, either in terms of legislative barriers, consumer demand, or encouragement of protests elsewhere. Wal-Mart is more likely to open stores that are particularly profitable, even if they are protested, and in such cases, they also make larger donations to community causes. We find broad support for our predictions. Our uncertainty-based account of protests as signals stands in sharp contrast to full-information models which predict that protests should be rare miscalculations.
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Source: American Journal of Sociology
Ingram, Paul, Lori Qingyuan Yue, and Hayagreeva Rao. "Trouble in Store: Probes, Protests and Store Openings by Wal-Mart: 1998-2007." American Journal of Sociology 116, no. 1 (2010): 53-92.