Agenda

Reassuring, confirming or distancing? An analysis of post-Diesel gate trademark filings in the US car market

Authors: Guido Berends, Carolina Castaldi, Vittoria Scalera

Abstract: Companies are increasingly scrutinized for their environmental behavior, and many struggle to develop strategies that build environmental legitimacy. We examine these challenges when environmental legitimacy is questioned, after an industry is exposed to an environmental scandal. Our focus is on how firms adapt their trademark strategies in response to a scandal. Trademarks are particularly relevant because they serve two functions: protecting and building reputation, as well as signaling new product development activities. In terms of environmental legitimacy, clean trademarks—i.e., trademarks related to products embedding clean technologies—are a logical choice to signal commitment to the environment. However, it is unclear to what extent companies might resort to clean trademarks in response to an environmental scandal. We develop hypotheses on the expected clean trademark strategies by building on complementary theories. We test our hypotheses using the Dieselgate scandal and the United States car market as an empirical test bed. We found that firms exposed to Dieselgate filed more clean trademarks, which we interpreted as a strategy to reassure the market. However, firms that had already developed clean technologies filed fewer clean trademarks, which could be seen as a way to distance themselves from the rest of the industry.