The Multifaceted Interplay between Firms and the Financial Community: A Marketing Perspective

摘要

This dissertation, using a two-essay format, focuses on broadening the targets of strategic marketing communication to reach major participants in financial markets, which are necessary for accessing cash and strategic assets needed by modern, agile corporations. Research in marketing so far has been reluctant to address the prospect of marketing strategy in targeting the financial community. This dissertation tries to close this gap. In the first essay, we employ a scenario-based behavioral experiment to test the impact of disclosure of customer-based brand equity and customer satisfaction as strong indicators of marketing productivity on the sell-side financial analyst's stock price forecast. We find that they favorably factor the increase in the value of customer-based brand equity but not customer satisfaction into their stock price forecasts. Moreover, we observe a synergistic (positive/non-linear) interaction effect of customer satisfaction and customer-based brand equity information on analyst's stock price forecast. This means analysts pay attention to customer satisfaction information when brand equity information also is revealed, and both indicate a positive uptake in value. We also empirically test the effect of brand equity on the analyst's (i.e., a projected security price level over a 12-month horizon) and their forecast accuracy using an analyst-level large longitudinal data set over from 2007 to 2015. We show that customer-based brand equity increases forecast accuracy and is positively associated with the target price. Analyst's experience, as a proxy for skill, moderates the relationship between customer-based brand equity and analyst's target price and forecast accuracy. Interestingly, the positive effect of customer-based brand equity on target price weakens as analyst's experience increases. We do not find support for the moderating role of analyst's experience in the relationship between customer-based brand equity and forecast accuracy. Overall, our results suggest that firms can benefit from voluntary disclosure of brand equity, beyond their traditional financial reporting. In the second essay, we focus on the important and relevant role of institutional investors in financing innovation. Institutional investors are increasingly powerful market participants. They owned 63 percent of the outstanding public corporate equity in 2016 (Board of Governors of the Federal Reserve System 2016, p. 130). Drawing on Merton's (1987) model of capital market equilibrium with incomplete information and limited attention framework (Peng and Xiong 2006), we show that the relationship between innovation performance measured by stock returns to a new product preannouncement and institutional investor ownership is contingent upon the intensity of investor relations. We analyze a large longitudinal data set on new product preannouncements issued by firms from 2007 to 2015 in the biopharmaceutical industry to test our hypothesized relationships. Our findings suggest that investor relations intensity improves a firm's institutional investor following in response to a new product preannouncement. However, stock returns to a new product preannouncement did not directly influence institutional investor ownership. We also did not find support for the effects of brand sentiment surrounding a new product preannouncement and announcement specificity on the institutional investor ownership.