The Radical Flank Revisited: How Regulatory Discretion Shapes the Effectiveness of Social Activism on Business Outcomes.

This article examines how the interaction of moderate and radical social activist tactics—known as the radical flank effect—impacts firm outcomes in regulated markets, focusing on the U.S. hydroelectric power sector from 1987 to 2019. It identifies regulatory agency discretion, defined as regulators' flexibility to interpret and implement public policies, as a key factor determining whether the radical flank effect enhances or diminishes activist influence. Empirical analysis shows that high regulatory discretion amplifies a positive radical flank effect, whereby combined radical and moderate tactics delay licensing approvals and negatively affect firms, while low discretion produces a negative radical flank effect, accelerating approvals and benefiting firms. The study contributes to understanding how institutional arrangements shape social movement impacts on regulatory decision-making and offers insights for managers, activists, and policymakers navigating stakeholder influence in regulated industries.