Marketing and firm value: Metrics, methods, findings, and future directions

Journal of Marketing Research

Volumn 46, Issue 3, 2009, Pages 293-312

  Srinivasan, Shuba ^a   Hanssens, Dominique M ^a  

^a NONE

Author keywords

Empirical findings; Financial performance; Market valuation modeling; Marketing and firm valuation; Return on marketing investment

Indexed keywords

EID: 68649106875     PISSN: 00222437     EISSN: None     Source Type: Journal    
DOI: 10.1509/jmkr.46.3.293     Document Type: Article

References (131)

1. Aaker, David A. and Robert Jacobson (1987), "The Role of Risk in Explaining Differences in Profitability," Academy of Management Journal, 30 (2), 277-96.
2. Aaker, David A. and Robert Jacobson (1994), "The Financial Information Content of Perceived Quality," Journal of Marketing Research, 31 (May), 191-201.
3. Aaker, David A. and Robert Jacobson (2001), "The Value Relevance of Brand Attitude in High-Technology Categories," Journal of Marketing Research, 38 (November), 485-93.
4. Agarwal, J. and Wagner A. Kamakura (1995), "The Economic Worth of Celebrity Endorsers: An Event Study Analysis:" Journal of Marketing, 56 (July), 56-62.
5. Anderson, Eugene W., Claes Fomell, and Sanal K. Mazvancheryl (2004), "Customer Satisfaction and Shareholder Value," Journal of Marketing, 68 (October), 172-85.
6. Ang, Andrew, Joseph Chen, and Yuhang Xing (2006), "Downside Risk," Review of Financial Studies, 19 (4), 1191-1239.
7. Ball, Ray and Phillip Brown (1968), "An Empirical Evaluation of Accounting Income Numbers," Journal of Accounting Research, 6 (2), 159-78.
8. Barber, Brad and John D. Lyon (1997), "Detecting Long-Run Abnormal Stock Returns: The Empirical Power and Specification of Test Statistics," Journal of Financial Economics, 43 (3), 34 1-72.
9. Barth, Mary E., Michael Clement, George Foster, and Ron Kasznik (1998), "Brand Values and Capital Market Valuation," Review of Accounting Studies, 3 (1-2), 41-68.
10. Bayus, Barry, Gary Erickson, and Robert Jacobsbn (2003), "The Financial Rewards of New-Product Introductions in the Personal Computer Industry," Management Science, 49 (2), 197-210.
11. Benartzi, Shlomo and Richard H. Thaler (1995), "Myopic Loss Aversion and the Equity Premium Puzzle," Quarterly Journal of Economics, 110 (1), 73-92.
12. Blattberg, Robert C., Richard Briesch, and Ed Fox (1995), "How Promotions Work," Marketing Science, 14 (3), G122-32.
13. Bollerslev, Tim and Benjamin YB. Zhang (2003), "Measuring and Modeling Systematic Risk in Factor Pricing Models Using High-Frequency Data," Journal of Empirical Finance, 10 (5), 533-5 8.
14. Bray, Alon and John B. Heaton (2002), "Competing Theories of Financial Anomalies," Review of Financial Studies, 15 (2), 575-606.
15. Brennan, Michael J. (1991), "A Perspective on Accounting and Stock Prices:" Accounting Review, 66 (1), 67-79.
16. Brennan, Michael J. and Yihong Xia (2001), "Assessing Asset Pricing Anomalies:" Review of Financial Studies, 14 (4), 905-942.
17. Brown, Gregory and Nishad Kapadia (2007), "Firm-Specific Risk and Equity Market Development," Journal of Financial Economics, 84 (2), 358-88.
18. Brown, Lawrence D., Robert L. Hagerman, Paul A. Griffin, and Mark E. Zmijewski (1987), "Security Analyst Superiority Relative to Univariate Time Series Models in Forecasting Quarterly Earnings," Journal of Accounting and Economics, 9 (1), 61-87.
19. Brown and Michael S. Rozeff (1978), "The Superiority of Analysts' Forecasts as Measure of Expectations: Evidence from Earnings:" Journal of Finance, 33 (1), 1-6.
20. Campbell, John, Martin Lettau, Burton Malkiel, and Yexiao Xu (2001), "Have Individual Stocks Become More Volatile? An Empirical Exploration of Idiosyncratic Risk," Journal of Finance, 56 (1), 1-43. (Pubitemid 33581652)
21. Carhart, Mark M. (1997), "On Persistence in Mutual Fund Performance" Journal of Finance, 52 (1), 57-82.
22. Chan, Louis K.C., Josef Lakonishok, and Theodore Sougiannis 2001), "The Stock Market Valuation of Research and Development Expenditure:" Journal of Finance, 5 (6), 2431-56.
23. Chaney, Paul K., Timothy M. Devinney, and Russell S. Winer (1991), "The Impact of New Product Introductions on the Market Value of Firms," Journal of Business, 64 (4), 573-610.
24. Chon, Gina (2006), "GM Ups the Ante in Warranty War," The Wall Street Journal, (September 7), D1-D2.
25. Cronqvist, Henrik (2006), "Advertising and Portfolio Choice," working paper, Fisher School of Business, Ohio State University.
26. Daniel, Kent and Sheridan Titman (1997), "Evidence on the Characteristics of Cross-Sectional Variation in Stock Returns:" Journal of Finance, 52 (1), 1-33. (Pubitemid 127343961)
27. Daniel, Kent and Sheridan Titman (1999), "Market Efficiency in an Irrational World," Financial Analyst Journal, 55 (6), 28-40.
28. Davis, John L., Eugene F. Fama, and Kenneth F. French (2000), "Characteristics, Covariances, and Average Returns: 1929 to 1997," Journal of Finance, 55 (1), 389-406.
29. De Bondt, Werner and Richard Thaler (1985), "Does the Stock Market Overreact?" Journal of Finance, 40 (3), 793-808.
30. Dekimpe, Marnik 0. and Dominique M. Hanssens (1995), "The Persistence of Marketing Effects on Sales:" Marketing Science, 14 (1), 1-21.
31. DiCarlo, Lisa (2005), "Dell Satisfaction Rating Takes Deep Dive:" (accessed December 19, 2007), [available at http://www.forbes.com/ 2005/08/l6/dell-customersatisfaction-falls-cx-ld-0816de11.html].
32. Doukas, John and Lorne Switzer (1992), "The Stock Market's Valuation of R&D Spending and Market Concentration," Journal of Economics and Business, 44 (2), 95-114.
33. Eddy, Albert A. and George B. Saunders (1980), "New Product Announcements and Stock Prices," Decision Sciences, 11 (1), 90-97.
34. Elberse, Anita (2007), "The Power of Stars: Do Star Actors Drive the Success of Movies?" Journal of Marketing, 71 (October), 102-120.
35. Erickson, Gary and Robert Jacobson (1992), "Gaining Competitive Advantage Through Discretionary Expenditures: The Returns to R&D and Advertising," Management Science, 38 (9), 1264-79.
36. Eun, Cheol S. and Sangdai Shim (1989), "International Transmission of Stock Market Movements," Journal of Financial and Quantitative Analysis, 24 (2), 24 1-56.
37. Fama, Eugene F. (1965), "Random Walks in Stock Market Prices," Financial Analysts Journal, 21(5), 55-59.
38. Fama, Eugene F. (1970), "Efficient Capital Markets: A Review of Theory and Empirical Work:" Journal of Finance, 25 (2), 383-417.
39. Fama, Eugene F. (1991), "Efficient Capital Markets: II," Journal of Finance, 46 (5), 1575-1617.
40. Fama, Eugene F. (1998), "Market Efficiency, Long-Term Returns, and Behavioral Finance," Journal of Financial Economics, 49 (3), 283-306.
41. Fama, Eugene F., Lawrence Fisher, Michael Jensen, and Richard Roll (1969), "The Adjustment of Stock Prices to New Information," International Economic Review, 10 (1), 1-21.
42. Fama, Eugene F. and Kenneth French (1992), "The Cross-Section of Expected Stock Returns," Journal of Finance, 47 (2), 427-65.
43. Fama, Eugene F. and Kenneth French (1996), "Multifactor Explanations of Asset Pricing Anomalies," Journal of Finance, 51 (1), 55-84.
44. Fama, Eugene F. and Kenneth French (2006), "The Value Premium and the CAPM," Journal of Finance, 61 (5), 2163-85.
45. Fischer, Marc, Hyun Shin, and Dominique M. Hanssens (2009), "The Impact of Marketing Expenditures on the Volatility of Revenues and Cash Flows," working paper, Anderson School of Management, University of California, Los Angeles.
46. Fornell, Claes, Sunil Mithas, Forrest Morgeson, and M.S. Krishnan (2006), "Customer Satisfaction and Stock Prices: High Returns, Low Risk," Journal of Marketing, 70 (January), 3-14.
47. Frieder, Laura and Avanidhar Subrahmanyam (2005), "Brand Perceptions and the Market for Common Stock," Journal of Financial and Quantitative Analysis, 40 (1), 57-85.
48. Gallaher, Steven, Ron Kaniel, and Laura Starks (2005), "Madison Avenue Meets Wall Street: Mutual Fund Families, Competition and Advertising," working paper, McCombs School of Business, University of Texas at Austin.
49. Geyskens, Inge, Katrijn Gielens, and Marnik G. Dekimpe (2002), "The Market Valuation of Internet Channel Additions," Journal of Marketing, 66 (April), 102-119.
50. Ghysels, Eric, Pedro Santa-Clara, and Rossen Valkanov (2006), "Predicting Volatility: How to Get Most Out of Returns Data Sampled at Different Frequencies," Journal of Econometrics, 131 (1-2), 59-95.
51. Gielens, Katrijn, Linda Van de Gucht, Jan-Benedict E.M. Steenkamp, and Marnik G. Dekimpe (2008), "Dancing with a Giant: The Effect of Wal-Mart's Entry into the United Kingdom on the Performance of European Retailers," Journal of Marketing Research, 45 (October), 519-34.
52. Goyal, Amit and Pedro Santa-Clara (2003), "Idiosyncratic Risk Matters!" Journal of Finance, 58 (3), 975-1007. (Pubitemid 37316132)
53. Graham, John R., Campbell R. Harvey, and Shivaram Rajgopal (2005), "The Economic Implications of Corporate Financial Reporting," Journal of Accounting and Economics, 40 (3), 3-73.
54. Granger, Clive W.J. and Paul Newbold (1986), Forecasting Economic Time Series, 2d ed. San Diego: Academic Press.
55. Griliches, Zvi (1981), "Market Value, R&D and Patents," Economics Letters, 7 (2), 183-87.
56. Gruca, Thomas S. and Lopo L. Rego (2005), "Customer Satisfaction, Cash Flow, and Shareholder Value," Journal of Marketing, 69 (July), 115-30.
57. Grullon, Gustavo, George Kanatas, and Piyush Kumar (2006), "The Impact of Capital Structure on Advertising Competition: An Empirical Study," Journal of Business, 79 (6), 3101-3124.
58. Grullon, Gustavo, and James P. Weston (2004), "Advertising, Breadth of Ownership and Liquidity," Review of Financial Studies, 17 (2), 439-61.
59. Gupta, Sunil, Donald R. Lehmann, and Jennifer Ames Stuart (2004), "Valuing Customers," Journal of Marketing Research, 41 (February), 7-18.
60. Gupta, Sunil, Donald R. Lehmann and Valarie Zeithaml (2006), "Customer Metrics and Their Impact on Financial Performance," Marketing Science, 25 (6), 687-717.
61. Hamilton, James (1994), Time Series Analysis. Princeton, NJ: Princeton University Press.
62. Hanssens, Dominique M., Leonard J. Parsons, and Randall L. Schultz (2001), Market Response Models, 2d ed. Boston: Kluwer Academic Publishers.
63. Horsky, Dan and Patrick Swyngedouw (1987), "Does It Pay to Change Your Company's Name? A Stock Market Perspective," Marketing Science, 6 (4), 320-35.
64. Information Week (2007), "Apple Stock Tumbles After iPhone Fiasco," (September 7), [available at http://www.informationweek.com/news/ showArticle.jhtml?articleID=201804925].
65. Ittner, Christopher and David Larcker (1998), "Are Non-Financial Measures Leading Indicators of Financial Performance? An Analysis of Customer Satisfaction," Journal of Accounting Research, 36 (3, Supplement), 1-35.
66. Jacobson, Robert and Natalie Mizik (2009a), "Assessing the Value-Relevance of Customer Satisfaction," (March 21), (accessed April 14, 2009), [available at http://ssrn.com/abstract=990783].
67. Jacobson, Robert and Natalie Mizik (2009b), "The Financial Markets and Customer Satisfaction: Reexamining Possible Financial Market Mispricing of Customer Satisfaction," Marketing Science, 28, forthcoming.
68. Jaffe, Adam B. (1986), "Technological Opportunity Spillovers of R&D: Evidence from Firm's Patents, Profits, and Market Value," American Economic Review, 76 (5), 984-1001.
69. Jain, Prem C. and Johanna Shuang Wu (2000), "Truth in Mutual Fund Advertising: Evidence on Future Performance and Fund Hows," Journal of Finance, 55 (2), 937-58.
70. Jegadeesh, Narasimhan and Sheridan Titman (1993), "Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency," Journal of Finance, 48 (1), 65-91.
71. Johnson, Shane A. and Mark B. Houston (2000), "A Reexamination of the Motives and Gains in Joint Ventures," Journal of Financial and Quantitative Analysis, 35 (1), 67-85.
72. Joshi, Amit M. and Dominique M. Hanssens (2008), "Advertising Spending and Market Capitalization," working paper, Anderson School of Management, University of California, Los Angeles.
73. Joshi, Amit M. and Dominique M. Hanssens (2009), "Movie Advertising and the Stock Market Valuation of Studios," Marketing Science, 28 (2), 239-50.
74. Keller, Kevin and Donald R. Lehmann (2006), "Brands and Branding: Research Findings and Future Priorities," Marketing Science, 25 (6), 740-59.
75. Kelm, Kathryn M., V.K. Narayanan, and George E. Pinches (1995), "Shareholder Value Creation During R&D and Commercialization Stages," Academy of Management Journal, 38 (3), 770-86.
76. Knez, Peter J. and Mark J. Ready (1997), "On the Robustness of Size and Book-to-Market in Cross-Sectional Regressions," Journal of Finance, 52 (4), 1355-82.
77. Kothari, S.P. (2001), "Capital Markets Research in Accounting," Journal of Accounting and Economics, 31 (1-3), 105-231.
78. Kothari, S.P. and Jerold Warner (2006), "Econometrics of Event Studies," in Handbook of Empirical Corporate Finance, Espen Eckbo, ed. Amsterdam: EIsevier/North-Holland, 3-36.
79. Lane, Vicki and Robert Jacobson (1995), "Stock Market Reactions to Brand Extension Announcements: The Effects of Brand Attitude and Familiarity," Journal of Marketing, 59 (January), 63-77.
80. Lev, Baruch (1989), "On the Usefulness of Earnings and Earnings Research: Lessons and Direction from Two Decades of Empirical Research," Journal of Accounting Research, 27 (3), 153-92.
81. Lev, Baruch (2004), "Sharpening the Intangibles Edge," Harvard Business Review, 82 (6), 108-116.
82. Lev, Baruch and Theodore Sougiannis (1996), "The Capitalization, Amortization and Value-Relevance of R&D," Journal of Accounting and Economics, 96 (1), 107-138.
83. Lintner, John (1965), "The Valuation of Risk Assets and the Selection of Risky Investments in Stock Portfolios and Capital Budgets," Review of Economics and Statistics, 47 (1), 13-37.
84. Loughran, Tim (1997), "Book-to-Market Across Firm Size, Exchange, and Seasonality: Is There an Effect?" Journal of Financial and Quantitative Analysis, 32 (3), 249-68.
85. Loughran, Tim and Jay R. Ritter (2000), "Uniformly Least Powerful Tests of Market Efficiency," Journal of Financial Economics, 55 (3), 361-89.
86. Luo, Xueming (2007), "Consumer Negative Voice and Firm Idiosyncratic Stock Returns," Journal of Marketing, 71 (July), 75-88.
87. Luo, Xueming and C.B. Bhattacharya (2006), "Corporate Social Responsibility, Customer Satisfaction, and Market Value," Journal of Marketing, 70 (July), 1-18.
88. Luo, Xueming and Naveen Donthu (2006), "Marketing's Credibility: A Longitudinal Investigation of Marketing Communication Productivity and Shareholder Value," Journal of Marketing, 70 (October), 70-91.
89. Lyon, John, Brad Barber, and Chin-Ling Tsai (1999), "Improved Methods for Tests of Long-Run Abnormal Stock Returns," Journal of Finance, 54 (1), 165-201.
90. Madden, Thomas J., Frank Fehle, and Susan Fournier (2006), "Brands Matter: An Empirical Demonstration of the Creation of Shareholder Value Through Branding," Journal of the Academy of Marketing Science, 34 (2), 224-35.
91. Markovitch, Dmitri and Joel H. Steckel (2006), "Assessing Strategy Effectiveness: The Stock Market as Crystal Ball," working paper, Stern School of Business, New York University.
92. Markovitch, Dmitri, and Bernard Yeung (2005), "Using Capital Markets as Market Intelligence: Evidence from the Pharmaceutical Industry," Management Science, 51 (10), 1467-80.
93. Mathur, Lynette Knowles and Ike Mathur (2000), "An Analysis of the Wealth Effects of Green Marketing Strategies," Journal of Business Research, 50 (2), 193-200.
94. Mathur, Lynette Knowles, and Nanda Rangan (1997), "The Wealth Effects Associated with a Celebrity Endorser: The Michael Jordan Phenomenon," Journal of Advertising Research, 37 (3), 67-73.
95. McAlister, Leigh, Raji Srinivasan, and Min Chung Kim (2007), "Advertising, Research and Development, and Systematic Risk of the Firm," Journal of Marketing, 71 (January), 35-48.
96. McFarland, Henry (1988) "Evaluating q as an Alternative to the Rate of Return in Measuring Profitability," Review of Economics and Statistics, 70 (4), 614-22.
97. Mitchell, Mark and Erik Stafford (2000), "Managerial Decisions and Long-Term Stock-Price Performance," Journal of Business, 73 (3), 287-329.
98. Mitra, Debanjan and Peter N. Golder (2006), "How Does Objective Quality Affect Perceived Quality? Short-Term Effects, Long-Term Effects, and Asymmetries," Marketing Science, 25 (3), 230-47.
99. Mittal, Vikas, Eugene W. Anderson, Akin Sayrak, and Pandu Tadikamalla (2005) "Dual Emphasis and the Long-Term Financial Impact of Customer Satisfaction," Marketing Science, 24 (4), 544-55.
100. Mizik, Natalie and Robert Jacobson (2003), "Trading Off Between Value Creation and Value Appropriation: The Financial Implications of Shifts in Strategic Emphasis," Journal of Marketing, 67 (January), 63-76.
101. Mizik, Natalie and Robert Jacobson (2004), "Stock Return Response Modeling," in Assessing Marketing Strategy Performance, Christine Moorman and Donald R. Lehmann, eds. Cambridge, MA: Marketing Science Institute, 29-46.
102. Mizik, Natalie and Robert Jacobson (2007), "Myopic Marketing Management: The Phenomenon and Its Long-Term Impact on Firm Value, Marketing Science, 26 (3), 361-79.
103. Mizik, Natalie and Robert Jacobson (2008), "The Information Content of Brand Attributes," Journal of Marketing Research, 45 (February), 15-32.
104. Mullainathan, Senthil and Andrei Shleifer (2005), "Persuasion in Finance," Working Paper No. 11838, National Bureau of Economic Research.
105. Nath, Pravin and Vijay Mahajan (2008), "Chief Marketing Officers: A Study of Their Presence in Firms' Top Management Teams," Journal of Marketing, 72 (January), 65-81.
106. Nelson, Phillip (1974), "Advertising as Information," Journal of Political Economy, 82 (4), 729-54.
107. Nijs, Vincent, Shuba Srinivasan, and Koen Pauwels (2007), "Retail Price Drivers and Retailer Performance," Marketing Science, 26 (4), 473-87.
108. Osinga, Ernst, Peter Leeflang, Shuba Srinivasan, and Jaap Wierenga (2009), "Why Do Firms Invest in Consumer Advertising with Limited Sales Response? A Shareholder's Perspective," working paper, School of Management, Boston University.
109. Pakes, Ariel (1985), "On Patents, R&D, and Stock Market Rate of Return," Journal of Political Economy, 93 (2), 390-409.
110. Pauwels, Koen H. and Dominique M. Hanssens (2007), "Performance Regimes and Marketing Policy Shifts," Marketing Science, 26 (3), 293-311.
111. Pauwels, Koen H., and S. Siddarth (2002), "The Long-Term Effects of Price Promotions on Category Incidence, Brand Choice, and Purchase Quantity," Journal of Marketing Research, 39 (November), 421-39.
112. Pauwels, Jorge M. Silva-Risso, Shuba Srinivasan, and Dominique M. Hanssens (2004), "New Products, Sales Promotions, and Firm Value: The Case of the Automobile Industry," Journal of Marketing, 68 (October), 142-56.
113. Peppers, Don and Martha Rogers (2005), Return on Customer: Creating Maximum Value from Your Scarcest Resource. New York: Currency Doubleday.
114. Rao, Ramesh K.S. and Neeraj Bharadwaj (2008), "Marketing Initiatives, Expected Cash Flows, and Shareholders' Wealth," Journal of Marketing, 72 (January), 16-26.
115. Rao, Vithala R., Manoj K. Agarwal, and Denise Dahlhoff (2004), "How Is Manifest Branding Strategy Related to the Intangible Value of a Corporation?" Journal of Marketing, 68 (October), 126-41.
116. Rappaport, Alfred (1987), "Stock Market Signals to Managers," Harvard Business Review, 65 (6), 57-62.
117. Reuters (2006), "Wal-Mart Saying Goodbye to Germany," (July 28), (accessed December 19, 2007), [available at http://www.foxnews.com/story/0, 2933,206100,00.html].
118. Shiller, Robert J. (2003), "From Efficient Market Theory to Behavioral Finance," Journal of Economic Perspectives, 17 (1), 83-104.
119. Shin, Hyun, Mariko Sakakibara, and Dominique M. Hanssens (2008), "Incentive Structure of Leader vs. Follower in Marketing and R&D Investment," working paper, Anderson School of Management, University of California, Los Angeles.
120. Simon, Carol J. and Mary W. Sullivan (1993), "The Measurement and Determinants of Brand Equity: A Financial Approach," Marketing Science, 12 (1), 28-52.
121. Sirri, Erik R. and Peter Tufano (1998), "Costly Search and Mutual Fund Flows," Journal of Finance, 53 (5), 1589-1622.
122. Sorescu, Alina, Venkatesh Shankar, and Tarun Kushwaha (2007), "New Product Preannouncements and Shareholder Value: Don't Make Promises You Can't Keep," Journal of Marketing Research, 44 (August), 468-89.
123. Srinivasan, Raji and Sundar Bharadwaj (2004), "Event Studies in Marketing Research," in Assessing Marketing Strategy Performance, Christine Moorman and Donald R. Lehmann, eds. Cambridge, MA: Marketing Science Institute, 9-28.
124. Srinivasan, Shuba, Koen H. Pauwels, Dominique M. Hanssens, and Marnik G. Dekimpe (2004), "Do Promotions Benefit Manufacturers, Retailers or Both?" Management Science, 50 (5), 617-29.
125. Srinivasan, Shuba, Jorge M. Silva-Risso, and Dominique M. Hanssens (2009), "Product Innovations, Advertising, and Stock Returns," Journal of Marketing, 73 (January), 24-43.
126. Srivastava, Rajendra, Tasadduq A. Shervani, and Liam Fahey (1998), "Market-Based Assets and Shareholder Value: A Framework for Analysis," Journal of Marketing, 62 (January), 1-18.
127. Subrahmanyam, Avanidhar (2005), "Distinguishing Between Rationales for Short-Horizon Predictability in Stock Returns," Financial Review, 40 (1), 11-35.
128. Tellis, Gerard J. and Joseph Johnson (2007), "The Value of Quality," Marketing Science, 26 (6), 758-73.
129. Thaler, Richard H. (2005), Advances in Behavioral Finance, Vol. 2. Princeton, NJ: Princeton University Press.
130. Trueman, Brett (1994), "Analyst Forecasts and Herding Behavior," Review of Financial Studies, 1 (1), 97-124.
131. Wingfield, Nick (2006), '"Boot Camp' May Boost Sales of Apple's Macs," The Wall Street Journal, (April 6), B1-B4.