Abstract
Purpose: Economic sanctions are increasingly used as tools of international norm enforcement, yet little is known about how home-country consumers evaluate firms' strategic responses to such measures. This research examines how different market exit extent strategies from sanctioned host countries affect home-country consumers' legitimacy judgments and support for firms. Design/methodology/approach: Drawing on legitimacy theory and research in international business, we develop and test a framework to explain how home-country consumers respond to full, partial and no-exit strategies. Findings: Across four studies using longitudinal secondary and experimental methods, we find that home-country consumers react more positively to firms that pursue full exit from a sanctioned market than to those that adopt partial or no exit strategies. Individual-level differences in susceptibility to normative influence, cognitive empathy, individualism and ethical views on the use of sanctions shape these evaluations. Originality/value: The findings contribute to theories of legitimacy, international divestment and moral stakeholder evaluation, and offer practical guidance to firms navigating the complexities of operating under economic sanctions.
