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Loss or gain? The impact of Chinese local celebrity endorser scandal on the global market value of the endorsed brands

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Abstract

Can a local celebrity endorser event influence the endorsed global brand’s stock value? Employing cultural perspective, signal theory and attribution theory, we hypothesized that, in an emerging market such as China, the endorsed global brands could gain and brands endorsed by a low-blameworthy celebrity could gain more from a local celebrity endorser scandal event. Using event study method, our results suggest that the entire endorsed brand portfolio exhibits statistically significant gains on the global stock market shortly after the focal scandal event, and brand portfolio endorsed by low-blameworthiness celebrity accrued more gains than brand portfolio endorsed by high-blameworthiness celebrity. The discussion of managerial and policy implications is presented in the concluding section.

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Authors and Affiliations

  1. Strome College of Business, Old Dominion University, Norfolk, VA, 23529, USA

    Junzhou Zhang

  2. School of Business, State University of New York at Fredonia, E358 Thompson Hall, 280 Central Avenue, Fredonia, NY, 14063, USA

    Lei Huang

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  1. Junzhou Zhang
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  2. Lei Huang
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Correspondence to Junzhou Zhang.

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Zhang, J., Huang, L. Loss or gain? The impact of Chinese local celebrity endorser scandal on the global market value of the endorsed brands. J Market Anal 6, 27–39 (2018). https://doi.org/10.1057/s41270-018-0028-8

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  • DOI: https://doi.org/10.1057/s41270-018-0028-8

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