Is It Just One Rotten Apple? Investigating the Spillover Effects of Corporate Social Irresponsibility on Competitor CSR Perceptions

Despite increasing scholarly attention to corporate social irresponsibility (CSIR), most studies have centered on the firm directly involved in misconduct, neglecting how such behavior might influence consumer perceptions of other firms within the same industry. This study addresses that gap by exploring how CSIR affects not only the corporate evaluation of the offending firm but also consumers’ perceptions of competitor CSR. Grounded in attribution theory, the study proposes that perceived industry-level CSIR and consumer cynicism are key psychological mechanisms that shape these responses. Using a scenario-based design, data were collected from 409 Indian consumers. The CB-SEM results reveal that consumers generalize a firm’s irresponsible actions to the broader industry and competing firms, thereby significantly influencing their perceptions of ethicality across the category. This research contributes to the CSIR literature by highlighting attributional spillovers and offering managerial insights for firms seeking to safeguard brand credibility in ethically sensitive industries.