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Marketing- Finance Interface

The New Product Portfolio Innovativeness-Stock Returns Relationship: The Role Of Large Individual Investors' Culture (2018)
Cillo Paola, David A. Griffith, Gaia Rubera
Journal of Marketing, 2018, Vol. 82(6) 49-70

The marketing-finance interface literature has investigated the direct link between innovativeness and stock returns. Moving a step further, we investigate two unanswered questions: How and under what conditions is innovativeness associated with stock returns? Answering these questions is important for managers who have to defend innovation investments to board members and time the introductions of new products. We investigate large individual investors and their national culture in the food and beverage industry. Combining multiple datasets, we first investigate the relationship between innovativeness and large individual investor’s stock holding decisions (i.e., to sell, hold onto or buy a firm’s stocks). The results indicate that national culture moderates this relationship. At the firm level, we show that large investors’ stock holding partially mediates the innovativeness-stock returns relationship and that the culture of a firm’s large investors moderates this mediated relationship. Hence, we unveil a special segment of investors, large individual investors, which influence the extent to which firms benefit from innovativeness in the stock market.

Last change 17/01/2021

You Gotta Serve Somebody: The Effects of Firm Innovation on Customer Satisfaction and Firm Value (2017)
Rubera Gaia and Kirca Ahmet J.
Journal of the Academy of Marketing Science

Marketing actions must create value for two key stakeholders: customers and investors. Nevertheless, these two stakeholders differ in their evaluations of firm actions in critical ways. As a result, most managers believe that there is a critical trade-off between serving customers and shareholders. Drawing upon the marketing–finance interface, the authors investigate how this trade-off unfolds to impact customer satisfaction and firm value in the context of innovation. Specifically, the present study demonstrates that creating value for customers and shareholders are not two completely distinct goals, as the business press and managers fear; innovation can create value for shareholders by satisfying customers. However, results also indicate that a crucial trade-off between satisfying consumers and creating value for investors is indeed present, as those same factors (i.e., firm’s branding strategy and level of market dominance, industry-level competitive intensity) that enhance the effects of innovation on customer satisfaction depress the effects of innovation on firm value, and vice versa. The authors discuss the implications of these important findings for research and practice.

Last change 07/07/2018

Firm Innovativeness and its Performance Outcomes: A Meta-analytic Review and Theoretical Integration (2012)
Rubera Gaia and Kirca Ahmet H.
Journal of Marketing, 76(3): 130-147

Drawing on the chain-of-effects model as a unifying framework, this meta-analysis indicates that firm innovativeness indirectly affects firm value through its effects on market position and financial position. In addition, the findings suggest that innovativeness has direct positive effects on financial position and firm value. Moreover, the meta-analysis provides evidence of reverse causality in the innovativeness–firm value relationship. Importantly, the results also reveal that the positive effects of firm innovativeness on market position and financial position are stronger for larger firms, for firms that invest more in advertising, for firms in high-tech industries, for innovativeness outputs and for radical innovations. Finally, the meta-analytic evidence also indicates that the relationship between innovativeness and firm value is stronger for smaller firms, for firms that invest more in advertising, for firms in low-tech industries, for innovativeness inputs, for innovativeness culture, and for radical innovations.

Last change 17/06/2015

Last change 20/07/2018