Worldwide spread of the Weinstein scandal and the #MeToo movement: cross-country diffusion of reputation loss in the film industry

Abstract

With a focus on the moral context of the cultural industry, we examine the worldwide spread of reputation loss associated with the Harvey Weinstein sex scandal in the film industry. Specifically, we explore how the scandal and the related #MeToo moral movement affect the box office of multinational enterprises (MNEs) in international markets. By leveraging an institutional approach, we predict that extensive traditional and digital media coverage of #MeToo in a host country will promote attention convergence, and robust formal and informal institutions of gender equality will drive moral convergence. Attention and moral convergence foster the cross-country spread of reputation loss following the scandal, potentially penalizing MNEs associated with The Weinstein Company and adversely affecting their international revenue. Conversely, differences in traditional and digital media coverage and misaligned formal and informal institutions hinder the spread of reputation loss. We support our predictions with weekly global box office revenue data for film MNEs from 2015 to 2019 across 86 countries and a difference-in-difference specification. Our study provides insights into research on cultural industries and international business, emphasizing the role of mass media and institutions in the worldwide moral movement. We also discuss the social impact of our study on gender equality.