How negative publicity shapes consumer responses: the roles of country-of-origin and psychological contracts

Abstract This study investigates how negative publicity, country-of-origin (COO) and psychological contracts affect consumer response to local versus foreign brands in relational and transactional contexts. Three experimental studies were undertaken to assess these relationships. The findings show that corporate ability (CA)-related negative publicity is significantly related to foreign brand evaluations, whereas corporate social responsibility (CSR)-related publicity disproportionately affects local brands. Psychological contract has a significant mediation effect on the relationship between negative publicity and brand evaluations. The study provides insights into the interplay between corporate communication, branding and consumer behaviors. The study findings can be tailored for optimizing corporate communication strategies and brand management.