Contagion risk: How stakeholders mediate the impact of rivals’ misfortunes on firms

Figures & data

Figure 2. Summary of the methodology.

Figure 3. Sequence of events in the contagion process (Azimian et al., 2016).

Table 1. Examples of contagion types

		Form of Contagion Manifestation
		Demand Disruption	Supply Disruption	Operating Costs Escalation
Triggering Event Type	Product-Harm Events	In 2003, following the detection of a single case of mad cow disease on a farm in northern Alberta, international customers stopped buying Canadian beef (Statistics Canada, 2009).	In 2015, after a shipment from India was found to contain a foreign insect, Vietnam stopped importing peanuts from India (VBN, 2015). The failure of an importer to control its shipments disrupted supply to all other importers.	Following the recall of Tylenol painkillers in 1982, the FDA tightened packaging regulations, causing the pharmaceutical industry to lose a total of $8.68 billion (Dowdell et al., 1992).
	Operating Events	In 2011, following an accident in a Fukushima nuclear power plant designed by GE, Germany and Switzerland decided to phase out nuclear power.entirely, and Italy decided to abandon plans to build new nuclear plants (Kagramanyan, 2012). GE’s design failure affected the demand for other technology providers. entirely, and Italy decided to abandon plans to build new nuclear plants (Kagramanyan, 2012). GE’s design failure affected the demand for other technology providers.	Following the crash of two American Airline flights into World Trade Center towers on 11 September 2001, the private insurance market stopped providing insurance coverage for airlines (Kunreuther & Michel-Kerjan, 2004).American Airline’s security failure affected the insurance coverage of other airlines. American Airline’s security failure affected the insurance coverage of other airlines.	In 2010, a fire on an oil rig chartered by BP caused insurance premiums for deep water oil exploration to increase (Kollewe, 2010).
	Social/Environmental Events	Following the death of more than 1,000 garment workers in the collapse of the Rana-Plaza building which housed several separate garment factories, Disney stopped buying from its Bangladeshi manufacturers, although none of them were associated with the event (Greenhouse, 2014).	The supply of live cattle to Indonesian slaughterhouses was suspended after the Australian government banned live cattle exports to Indonesia because of the mistreatment of animals at some slaughterhouses (Minister for Agriculture and Water Resources, 2016). The misbehavior of a single slaughterhouse affected the supply of live cattle to other slaughterhouses.	After the spill of about 5 million barrels of oil into the Gulf of Mexico in 2010, the U.S. government tightened offshore oil and gas regulations, costing the industry hundreds of millions of dollars (Enerknol Research, 2015).

Figure 4. Contagion process and the involved actors.

Figure 5. Relationship between contagion risk and the contributing factors.

Figure 1. Social vs. fundamental contagions.

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