Strategic management research has established that the effects of a firm’s negative event can spill over to other firms in the same industry in the form of negative media coverage. We extend understanding of this phenomenon by suggesting that spillovers can also occur within the same firm and that positive events can also lead to negative coverage. We explore this internal inverse spillover in the context of reshoring, which is the movement of offshored operations back to the firm’s home country. We theorize that despite the many potential merits of reshoring, reshoring firms will receive more negative media coverage because reshoring is associated with tax breaks, something the media and public are increasingly scrutinizing as a form of corporate tax avoidance. We also suggest that firms can reduce negative media coverage by paying more in taxes before reshoring. Our findings support our theorizing, thereby contributing to research at the intersection of firm events and the media. We also contribute to management practice by showing how firms can manage internal inverse spillover effects (e.g., from tax breaks) in order to pursue value-creating actions (e.g., reshoring).
