Rüdiger Bachmann, Gabriel Ehrlich, Dimitrije Ruzic, 24 January 2018

There has been limited research on how groups’ collective reputations are affected by the misbehaviour of individual members. This column uses the Volkswagen emissions scandal as a natural experiment to explore group reputation externalities. German auto manufacturers that weren’t implicated in the scandal suffered significant declines in sales, stock returns, and public sentiment in the US. Volkswagen’s malfeasance appeared to materially harm the group reputation of German car engineering.

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