Title

Marketing Activities, Strategic Competition, and Firm Value

Document Type

Article

Publication Date

12-1-2018

School

Health Professions

Abstract

This study extends the prior literature on the effect of marketing activities on firm value by investigating whether the nature of strategic competition affects financial outcomes differentially. Using the competitive strategy measure (CSM), we show that marketing spending is beneficial (detrimental) to firm value when the firm is in strategic substitutes (complements) and the efficacy is a decreasing function of the degree of industry competition. The relative competitive position of a firm in the industry—whether it is a leader or a follower—matters in the quality and size of the effect of marketing spending. By bifurcating the nature of strategic competition into strategic substitutes and complements, we disentangle the dichotomous effects of marketing activities on firm value.

Publication Title

Canadian Journal of Administrative Sciences

Volume

35

Issue

4

First Page

577

Last Page

591

Find in your library

Share

COinS