Navigating Hong Kong’s Yellow Economic Circle: Implications for Japanese Businesses

Social movements vary based on their type of organization and ideologies and often mobilize various stakeholders and bring about changes in diverse social and political settings, creating widespread influence. The case of the Hong Kong social movement represents a unique setting with both moderate and radical actions taken by various activist groups. Such exposure led to a division between businesses, segmenting them into movement supporters and non-supporters, creating a “yellow-economic-circle”. This division spread not only to local but also to international businesses such as a wide variety of Japanese firms. We examine entrepreneurs’ responses to yellow-economic-circle using the strategy of self-labeling and the timing of their actions. We generate theoretical insights by integrating social movement, entrepreneurship, and time theories. By unpacking how social movements generate different effects for diverse stakeholders and highlighting the importance of heterogeneity in individuals’ perceptions in the decision-making process, we also recommend practical implications and avenues for future research. We diffuse our theorizing to the case of Japanese business and derive implications.