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Title: Strategic advertising in the aftermath of a corporate scandal
Authors: Andina-Díaz, Ascensión
Campos Méndez, Francisco Javier 
Jiménez González, Juan Luis 
Perdiguero, Jordi
UNESCO Clasification: 531101 Publicidad
Keywords: Corporate Scandals
Strategic Advertising
Substitutability, et al
Issue Date: 2024
Journal: Manchester School 
Abstract: This paper contributes to the literature on how firms change their advertising strategies after a corporate scandal by providing both a theoretical model and an empirical evaluation based on the idea that advertising acts as a signal of the product quality that is modulated by the number of competing substitutes in the market. This result is new to the literature and helps to explain cases in which, possibly counter-intuitively, a firm affected by a corporate scandal may optimally decide to reduce its advertising expenditures, rather than increase it, in an attempt to restore its reputation as quickly as possible. We find empirical support for this result in the Volkswagen Group's response to the Dieselgate scandal.
ISSN: 1463-6786
DOI: 10.1111/manc.12492
Source: Manchester School[ISSN 1463-6786], (Enero 2024)
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