Abstract

The examination of brand reputation has constituted a focal point within the realm of marketing, albeit with a dearth of exploration within the business crisis literature. This paper tries to contribute to this literature by elucidating the brand reputation’s dualistic impact during a crisis, consequently seeking to reconcile the previous varied results. We demonstrated that a pre-crisis transitory brand reputation (TBR) can exacerbate the damage of the crisis for less-reputed brands while a long-term prior brand reputation has a positive role after a data breach crisis. Additionally, we have shown that the negative effect of TBR is more vivid for B2C firms. We introduced the paradox of transitory resources that states in order to obtain long-term resources to preserve the brand in times of crisis, one should obtain transitory resources that backfire. We build our hypotheses based on the Expectation-Evidence framework and the literature on the data breach crisis. We used Twitter (rebranded as “X”) to gather and analyze stakeholder-generated content before the crisis. The sentiment analysis approach based on a bag of words is used in an event study methodology and cumulative abnormal return is the dependent variable. The findings of this study underscore the importance of a robust and enduring long-term brand reputation for businesses. Furthermore, a shift away from reliance on transient advertisements, returns, and reputational constructs is necessary for the firms to successfully recover after a crisis.