Market Reaction to Internet Enterprise Trust Repair Strategy——A Case Study of Baidu Wei Zexi and PPC Event

Abstract

Abstract:

Through literature review and data coding, the paper explores trust repair strategies adopted by Baidu in the "Wei Zexi" and "pay per click" events which are integrity negative events. The multiple linear regression results show that for the integrity negative events, the language and behavioral repair strategy and the government system repair strategy can positively repair public trust on an Internet company. T test and cumulative excess return rate line graphs show that market reaction to behavioral repair strategy are more positive than language repair strategy for integrity negative events. Market reactions to ritual behaviors that emphasize positive attributes of enterprises are more positive than compensated substantive behaviors. The short-term market reaction of timely system repair strategy of the government is more significant than that of the continuous system repair strategy. The market reactions to the government system repair strategy are more positive than that to the trust repair strategy adopted by the enterprise. The market reactions to repair strategy applied by Internet companies in the country where the enterprise is listed are more positive than that of the same repair strategy applied in the country where it is located. Based on this, the paper puts forward some advice for Internet companies and governments in relation to trust repair after integrity negative events.

Key words: Internet companies, negative events, trust repair strategy, market reactions

Li Jianliang, Li Dongwei, Zhang Chunting, Shen Pengyi. Market Reaction to Internet Enterprise Trust Repair Strategy——A Case Study of Baidu Wei Zexi and PPC Event[J]. , 2019, 31(9): 291-304.

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