Managers often have incentives to artificially inflate current-term earnings by cutting marketing expenditures, even if it comes at the expense of long-term profits. Since investors rely on current-term accounting measures to form expectations of future-term profits, inflating current-term...

The authors assess which brand asset metrics provide incremental information content to accounting performance measures in explaining stock return. The analysis focuses on the five pillars (i.e., central brand attributes) that form the basis for the newly updated Young amp; Rubicam Brand Asset...

We find evidence that some firms attempt to inflate current-term earnings (and thereby stock price) at the time of a seasoned equity offering (SEO). Earnings inflation takes place both through accruals and real activity earnings management. The financial markets do not properly value firms...

Making use of the efficient markets hypothesis as a starting point for analysis, we outline an approach for assessing financial value-relevance of marketing metrics. We illustrate the approach by investigating the association between information contained in the American Customer Satisfaction...

This paper estimates statistical cost. and revenue curves for a cross-section of banks in the years 1962-75. The primary data cover reported accounting or book rates of return. Approximations are also made to estimate economic or total returns. These approximations take into account changes in...

Much public attention and considerable controversy surround pharmaceutical marketing practices and their impact on physicians. However, views on the matter have largely been shaped by anecdotal evidence or results from analyses with insufficient controls. Making use of a dynamic fixed-effects...

We explore the extent to which R&D and advertising expenditures generate a comparative advantage that allows firms to earn supranormal profits. After controlling for unobserved firm-specific factors and the feedback between discretionary expenditures and profitability, our results suggest...