Impact of Distant Political Uncertainty on Retail Sales: Examining the Mechanism of Brand Line Length and Brand Type

Event details

A Research Seminar on "Impact of Distant Political Uncertainty on Retail Sales: Examining the Mechanism of Brand Line Length and Brand Type", jointly organised by Centre for Evolution of Global Business and Institutions (CEGBI) + Marketing, International Business and Entrepreneurship (MIBE) Group.

Intense political uncertainty can lead to retail revenue losses and store closures. For firms dealing with the cascading challenges of political uncertainty, the current study offers timely empirical insights related to the domino effects of distant political uncertainty (Dpol) as exists in a country that is neither an ally nor closely connected to the focal market. With large-scale data involving 2.9 million retail transactions and 691 brands in Bangladesh, a largely overlooked emerging market, the current research seeks to answer three pertinent questions: To what extent does Dpol affect retail sales revenue? Which mechanism drives the relationship between Dpol and retail sales revenue? Do key brand types (e.g., big-four brands, foreign brands, and private-label brands) influence Dpol’s impact on retail sales revenue? The findings reveal that Dpol affects retail sales revenue negatively, through brand line length, but the negative effects are moderated by brand type. Private-label and foreign brands can maintain or even expand brand line length, but big-four brands struggle to do so. These findings extend literature that tends to focus on mechanisms over which retailers have little control (e.g., macro environment, ideology). By introducing a new mechanism that retailers and brands can influence (i.e., brand line length), this study offers strategic marketing implications for retail and brand managers, who can capitalize on unique opportunities when markets are affected by Dpol. 

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