The Economic Impacts of Ethnic In-group Bias: A Case Study Analysis

33 Pages Posted: 20 Jul 2020

See all articles by Pyemo Afego

Pyemo Afego

University of Pretoria

Paul Capobianco

affiliation not provided to SSRN

Mei Wang

WHU - Otto Beisheim School of Management

Date Written: June 23, 2020

Abstract

This paper explores how in-group bias affects the economic decisions of agents in ethnically heterogeneous societies, as well as the economic consequences of these decisions. We study these connections by examining a corporate litigation case in Nigeria and the in-group sentiments expressed on Twitter as the events unfolded. The findings from analyzing user tweets show that affective identity sentiments were used to galvanize ethnic in-group members to support a boycott targeted towards a firm involved in the litigation. Importantly, we find that the boycott campaign had a negative and statistically significant effect on the shareholder wealth of the target firm. These findings suggest that in countries where there are significant ethnic differences and strong disparities, group-based biases can have considerable economic ramifications.

Keywords: In-group bias, Event study, Sentiment analysis, Boycotts, Social media, Stock return

JEL Classification: D91, G14, Z13

Suggested Citation

Afego, Pyemo and Capobianco, Paul and Wang, Mei, The Economic Impacts of Ethnic In-group Bias: A Case Study Analysis (June 23, 2020). Available at SSRN: https://ssrn.com/abstract=3634111 or http://dx.doi.org/10.2139/ssrn.3634111

Pyemo Afego (Contact Author)

University of Pretoria ( email )

South Africa

Paul Capobianco

affiliation not provided to SSRN

Mei Wang

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallender, 56179
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
16
Abstract Views
180
PlumX Metrics