When a celebrity endorser is disgraced: A twenty-five-year event study

This paper investigates how the announcement of negative information about a celebrity endorser impacts firm value, as measured by abnormal stock returns. The unique data sample consists of 93 celebrity disgraces that occurred between 1986 and 2011, affecting firms listed on US stock exchanges. Some evidence is documented of negative and statistically significant abnormal returns around these events. Returns are lower when the disgrace attracts much media attention, or when the celebrity itself is prominent. No significant returns are observed when a firm decides to terminate its endorsement contract with the disgraced celebrity. Endorsement contracts for “edgy” products, for which consumers may actually be attracted by negative publicity, are less likely to be terminated.     

POSITIVE ALPHAS,ABNORMAL PERFORMANCE,AND ILLUSORY ARBITRAGE

Jensen’s alpha is well known to be a measure of abnormal performance in the evaluation of securities and portfolios where abnormal performance is defined to be an expected return that exceeds the equilibrium risk adjusted rate. It is also well known that in estimating Jensen’s alpha, a nonzero value can be obtained by using incorrect factors or not employing time varying betas. This paper makes two additional contributions to the performance evaluation literature. First, we show that a stronger statement is true regarding the meaning of a nonzero Jensen’s alpha. In fact, a nonzero Jensen’s alpha represents an arbitrage opportunity. Second, we show that even if the correct factors and time varying betas are used, a nonzero Jensen’s alpha can result if the estimate is conditioned on the wrong information set in the presence of an asset price bubble. We call this illusory arbitrage. Both facts are relevant to interpreting the existing empirical literature evaluating the performance of mutual and hedge funds.     

Part-time restaurant employee perceptions of management practices: An empirical investigation

The UK hospitality industry increasingly relies on part-time rather than full-time employees to provide more flexible and cost-effective operations with potential trade-offs for service quality. Part-time employees can be divided into two distinct groups – permanent and temporary – each with very different employment rationales. This study compares full-time and part-time employee perceptions of management practices across twelve Cardiff-based restaurants using a self-administered questionnaire. There were significant differences between full-time and part-time employees but no difference between temporary and permanent part-time employees who were equally dissatisfied with management practices, job attitudes and job behaviours. The qualitative data showed the two part-time employees' sub-groups had different needs. Despite this they were treated as a homogenous group by managers. Lack of management understanding of part-time staff impacts on how they are treated and ultimately on service quality and customer satisfaction.     

An Experimental Study of the Effectiveness of Commercial Billboards in Televised Sports Arenas

A survey of 17 studies of advertising response functions reveals that S-shaped functions have never been found to hold for direct response advertising but would seem to be the rule for packaged goods advertising in competitive markets. It is argued that the difference is an artefact of the competitive situation rather than residingin the psychology of the consumer.     

Agency beliefs in the power of advertising

Two opposing schools of thought on how advertising works have emerged. One, known as the ‘strong theory’, holds that advertising plays a centrally important part in the economic system of a country and is therefore a formidable market force. This view is generally associated with North American scholars and practitioners. An opposing view is that advertising is a rather weaker force, capable only of gently nudging or reminding consumers, rather than actually persuading them. This paper reports on a study of Australian advertising practitioners' beliefs in the power of advertising. Findings suggest that opinion overall is more weighted towards the strong theory, particularly among creative personnel. However, educational background/field of study, age and agency experience play significant roles in determining a practitioner's theoretical orientation. Business faculty graduates are more inclined towards the weak theory, while mass communications, journalism and art school graduates lean in the direction of the strong theory. Furthermore, younger practitioners, and those with less than seven years' agency experience, are more inclined towards the strong theory, but as they age and gain more experience, they tend towards a weak theory orientation.     

Economic Crisis and its Impact on Promotion and Media in Cyprus

ABSTRACT

The economic crisis has redounded sharply upon marketing communications and media vehicles in Cyprus. In recession periods, communication and marketing budgets can contract while companies seek to obtain the best communication outcomes with more limited resources, both the size and the distribution of the communication mix can alter rapidly. This qualitative paper reveals that Cypriot advertising agencies now place greater emphasis upon marketing public relations (MPR) as it is perceived to be cost effective and efficient in achieving campaign objectives. The empirical data also indicates a shift towards the use of internet marketing and social media as more and more businesses are realizing the importance of consumer generated marketing and word-of-mouth/mouse marketing (WOMm).     

Marketing and public relations: the relationship revisited

This paper reviews the debate within both the marketing and public relations literatures concerning the relationship between the disciplines of marketing and public relations. The paper considers the arguments advanced in the marketing literature, in particular, for a growing convergence between these two disciplines and examines the recent emergence of the concept of'marketing public relations'. Here the paper takes as one starting point an article which identified a number of possible schematic representations of the relationship between the marketing and public relations functions and argues the case for a model of increasing convergence between them.The paper goes on to consider the more recent development of ‘marketing public relations', examining the arguments advanced. The paper argues that from a public relations perspective, the concept of marketing public relations can be seen as an attempt by marketers to ‘hijack’ public relations, incorporating it as an extra element within the promotional mix in order to inform, persuade or remind existing and prospective customers of product or company benefits. It is argued that what some marketers have termed marketing public relations may be no more than the publicity element of public relations practice under a new guise — one perhaps more acceptable than publicity in the societally orientated firms of today. The paper explores two distinct schools of thought — re-examining the relationship between marketing and public relations from both perspectives. The paper suggests that the uneasy symbiosis between these two functions in practice, reflects to a large degree the ambiguity surrounding the relationship between these concepts within much of the literature.     

Risk reporting: A study of risk disclosures in the annual reports of UK companies

The concepts of risk and risk management have received considerable attention lately, but this has yet to be reflected in empirical research examining firms’ risk reporting practices. This study seeks to address this gap in the literature and explores risk disclosures within a sample of 79 UK company annual reports using content analysis. A significant association is found between the number of risk disclosures and company size. Similarly a significant association is found between the number of risk disclosures and level of environmental risk as measured by Innovest EcoValue`21™ Ratings. However, no association is found between the number of risk disclosures and five other measures of risk: gearing ratio, asset cover, quiscore, book to market value of equity and beta factor. The paper also discusses the nature of the risk disclosures made by the sample companies specifically examining their time orientation, whether they are monetarily quantified and if good or bad risk news is disclosed. It was uncommon to find monetary assessments of risk information, but companies did exhibit a willingness to disclose forward-looking risk information. Overall the dominance of statements of general risk management policy and a lack of coherence in the risk narratives implies that a risk information gap exists and consequently stakeholders are unable to adequately assess the risk profile of a company.     

Relative Importance Measurement of the Moral Intensity Dimensions

The relative importance of the Jones’ [Jones, T. M.: 1991, Academy of Management Review 16(2), 366–395] six components of moral intensity was measured using a conjoint experimental design. The most important components influencing ethical perceptions were: probability of effect, magnitude of consequences, and temporal immediacy. Contrary to previous research, overall social consensus was not an important factor. However, consumers exhibit distinctly different patterns in ethical evaluation, and for approximately 15% of respondents social consensus was the most important dimension.