Abstract

Increasingly, celebrities engage in business not just as endorsers but also with a financial stake and decision-making role in the business. Whether initiated by the celebrity or by other founders, we refer to such instances of new ventures entering the market with a celebrity engaged in such ways as “celebrity entrepreneurship”. Partnering with a celebrity rather than contracting them as a celebrity endorser is not without its risks. Even the most mundane information concerning the lives of celebrities is newsworthy so when negative information concerning a celebrity surfaces, it spreads fast. When celebrities are involved with starting or owning a company, they carry their name with them. Under such circumstances, negative information about the celebrity might reflect negatively on the company as well. Distancing the firm from a disgraced celebrity may be much more difficult to do in the case of celebrity entrepreneurship. In this study we compare the consequences of negative information concerning a celebrity entrepreneur versus a celebrity endorser.

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