Toward an Institutional Perspective of Attribution, Legitimacy Judgment, and Trust Erosion During an Industry-Wide Crisis: An Abstract

Industry-wide product-harm crises – well-publicized instances of defective products/services or poor management permeating in an industry – often strike consumers, especially in emerging markets. Emerging markets are prone to industry-wide crises because of their underdeveloped institutions. For example, we have observed the milk contamination scandal in 2008 and the vaccine scandal in 2016; both happened in China. As another example, the 2017 Brazil rotten meat scandal in which more than 30 companies were reported to have unhygienic and illegal practices caused many worries about the meat exported from Brazil. An industry-wide crisis not only impairs consumers’ trust in the implicated brands but also erodes their trust in the whole industry and even the regulatory system that oversees the industry (Cleeren et al. 2008; Feng et al. 2014; Knight et al. 2008).