Managerial bonding and stock liquidity: An analysis of dual-class firms

Given the decision to create a second class of stock through a dual-class structure, we propose that management is more (less) likely to create a liquid secondary market for both classes of shares the lower (higher) its willingness to tie its personal wealth to firm performance. If market makers recognize this relation, they should assign a higher likelihood to trades motivated by superior information in shares of firms that list both classes of stock and a lower likelihood for firms that list only one class of stock pursuant to recapitalization. Additionally, they should assign a lower likelihood to trades motivated by superior information in shares of IPOs that choose a dual-class structure and list only one class relative to IPOs that remain single-class. Our empirical tests based on IPOS and recaps between 1985 and 1988 provide support for these propositions.     

Ownership structure and golden parachutes: Evidence of credible commitment or incentive alignment?

Using a sample of S & P 500 firms, we find that golden parachutes are associated with concentrated external ownership, less concentrated internal ownership, and non-Delaware incorporation. We find little support that concentrated external owners use golden parachutes as credible commitment devices. The general multivariate results support the incentive alignment hypothesis, and reaffirm the view that golden parachutes are a mechanism used to align managerial and shareholder interests when there is a separation between ownership and control. (JEL G32)     

Ownership structure and post-issue operating performance of firms conducting seasoned equity offerings in Thailand

This paper investigates the post-issue operating performance of companies that conducted seasoned equity offerings (SEO) in the Stock Exchange of Thailand (SET) during the period 1991 to 1994. It is documented that SEO firms exhibited declining operating performance after the offering. Further, there is a negative relation between inside ownership concentration and postissue operating performance decline. In support of the signaling effect, the ratio of issue proceeds to pre-issue equity also negatively relates to post-issue operating performance. Further, the negative relation between issue proceeds and operating performance decline is intensified among SEO firms with high insider ownership concentration. The finding offers evidence in support of agency conflicts and information asymmetry and suggests that the two factors are operating simultaneously.     

The relationship between major-league sports’ official sponsorship announcements and the stock prices of sponsoring firms

This study presents analysis of the impact of “official product” sports sponsorships with the National Football League (NFL), Major League Baseball (MLB), the National Hockey League (NHL), the National Basketball Association (NBA), and the Professional Golfers Association (PGA) on the stock prices of sponsoring firms. The primary finding of the study is that, in the main, announcements were accompanied by increases in shareholder wealth. The 53 sponsors analyzed experienced mean increases in stock valuations of about $257 million. A multiple regression analysis of firm-specific stock price changes and selected corporate and sponsorship attributes indicates that official product sponsorships with the NBA, NHL, and PGA and those with smaller market shares were associated with the largest gains in share prices. Although corporate cashflow (a proxy for agency conflicts) is statistically unrelated to shareholder approval, sponsorships by high-technology companies were associated with stronger stock price reactions than otherwise. Finally, product congruence with the sponsored sport was positively related to changes in stock prices. T. Bettina Cornwell (b.cornwell@business.uq.edu.au) is Professor of Marketing and Leader of the Marketing cluster in the UQ Business School at the University of Queensland, Australia. She was formerly Professor of Marketing in the Fogelman College of Business and Economics at the University of Memphis. She received her Ph.D. from the University of Texas. Her research focuses on promotion and consumer behavior, especially with regard to international and public policy issues. Other articles on the topic of sponsorship-linked marketing have recently appeared in theJournal of Advertising, the Journal of Advertising Research, theJournal of Business Research, andPsychology & Marketing. Stephen W. Pruitt (pruittst@umkc.edu) is the holder of the Arvin Gottlieb/Missouri Endowed Chair of Business Economics and Finance in the Henry W. Bloch School of Business and Public Administration at the University of Missouri-Kansas City. He received his Ph.D. from Florida State University. He has published more than 45 articles, most of which employ event study methodologies, in journals such as theJournal of Finance, theJournal of Political Economy, Financial Management, theJournal of Public Policy and Marketing, and theJournal of Advertising Research. John M. Clark (clarkj@cba.usm.edu) is an assistant professor of finance at the University of Southern Mississippi. He received his Ph.D. from the University of Alabama. His research interests include options and other derivatives, investments, and the impact of real events upon the stock prices of corporations. His work has appeared in scholarly outlets such as theJournal of Advertising Research, theFinancial Review, and theJournal of Business Ethics.     

Micro-level product-market dynamics: Shared knowledge and its relationship to market development

This work draws on consumer and psychology research to explain sociocognitive aspects of product-market dynamics at a higher level of specificity than prior research. The authors extend the field’s understanding of market-shaping shared knowledge through a theory-informed discussion of how shared product knowledge comes to exist and how it changes as product markets develop. They define shared knowledge as the aspects of product representations that are common across the minds of market actors, making it possible for them to understand one another. The authors also discuss ways to track shared knowledge content that is expressed in market narratives. As the characteristics of shared knowledge are explained and linked to stages of product-market development, the authors develop a set of researchable propositions to guide future research. The theoretical arguments and propositions in this article complement extant marketing strategy research by integrating individual-level consumer theory with market evolution models. José Antonio Rosa (jose.rosa@case.edu; Ph.D., University of Michigan) is an assistant professor of marketing at Case Western Reserve University. His research interests include product markets as sociocognitive phenomena, embodied knowledge in consumer and managerial sensemaking, consumer illiteracy and coping, commitment and motivation among members of network marketing organizations, and buying group satisfaction. His research has been published in marketing and management publications, including theJournal of Marketing and theAcademy of Management Journal. Before entering academia, he worked in the automotive and information systems industries. Jelena Spanjol (jspanjol@tamu.edu; Ph.D., University of Illinois) is an assistant professor of marketing at Texas A&M University. Her research interests include product market dynamics, product portfolio management, innovation, sensemaking, and organizational and managerial cognition in marketing strategy. Her research has been published in marketing and management publications, including theJournal of Marketing and several book chapters. Before academia, she worked in the scientific software industry.     

Export marketing,interfunctional interactions,and performance consequences

Firms with export operations have internal environments that are often geared toward serving the home market. As a result, export marketing and other business functions compete for resources, which thus increases the likelihood of conflict between them. Using survey responses from more than 700 exporting firms, the authors test a model of the antecedents and consequences of two important interaction variables: exporting’s interfunctional connectedness and conflict. The model explains 52 percent and 49 percent of variance in exporting connectedness and conflict, respectively. The authors identify the key drivers of successful interactions as follows: management commitment, organizational training and reward systems, relative functional identification, centralization, and export employee job satisfaction and commitment. The authors also demonstrate that connectedness is most critical for export success when export markets are in a state of turbulence, whereas conflict is most detrimental when the firm’s export environment is stable. John W. Cadogan (j.w.cadogan@lboro.ac.uk), Ph.D., is a professor of marketing in the Business School at Loughborough University, United Kingdom. His primary areas of research interest are international marketing, marketing strategy, and sales management. He has published on these issues in theJournal of International Business Studies, theInternational Journal of Research in Marketing, theJournal of Business Research, Industrial Marketing Management, theEuropean Journal of Marketing, theInternational Marketing Review, theJournal of Marketing Management, theJournal of Strategic Marketing, and other academic journals. He received his degree from the University of Wales (United Kingdom). Sanna Sundqvist (sanna.sundqvist@lut.fi), Ph.D., is a professor in international marketing in the Department of Business Administration at the Lappeenranta University of Technology (Finland). Her research interests deal with the international diffusion of innovations, market orientation (especially in an international context), and consumers’ adoption behavior. She has published in theJournal of Business Research, theInternational Journal of Research in Marketing, theEuropean Journal of Marketing, theCanadian Journal of Administrative Sciences, and theAustralasian Marketing Journal. She received her degree from the Lappeenranta University of Technology, Finland. Risto T. Saiminen (risto.salminen@lut.fi), Ph.D., is a professor of industrial engineering and management, especially marketing, in the Department of Industrial Engineering and Management at Lappeenranta University of Technology, Finland. His primary areas of research interest are customer relationships and networks in business marketing, pedagogy in industrial engineering and management, and international marketing. He has published on these issues in theJournal of Business and Industrial Marketing, theJournal of Marketing Management, theEuropean Journal of Engineering Education, theInternational Journal of Research in Marketing, theEuropean Journal of Marketing, and theAustralasian Marketing Journal. He received his degree from Lappeenranta University of Technology, Finland. Kaisu Puumalainen (kaisu.puumalainen@lut.fi), Ph.D., is a professor in technology research in the Department of Business Administration at Lappeenranta University of Technology, Finland. Her primary areas of research interest are innovation, international marketing, and small businesses. She has published on these issues in theInternational Journal of Research in Marketing, theJournal of Business Research, theEuropean Journal of Marketing, R&D Management, theCanadian Journal of Administrative Sciences, theJournal of International Entrepreneurship, theAustralasian Marketing Journal, and theInternational Journal of Production Economics. She received her degree from the Lappeenranta University of Technology, Finland.     

The adaptive consequences of pride in personal selling

This study examines the adaptive consequences of pride in personal selling and its self-regulation with colleagues and customers. Study 1 investigates the effects of experiencing pride, where two benefits were found. First, pride increases salespersons’ performance-related motivations. Specifically, it promotes the use of adaptive selling strategies, greater effort, and self-efficacy. Second, pride positively affects organizational citizenship behaviors. Study 2 takes an emotion-process point of view and compares excessive pride (hubris) with positive pride. The results show that salespeople are capable of self-regulating the expression of these emotions differently toward colleagues and customers via anticipated feelings of fear, shame, and regret. Salespeople, in other words, are affected by their emotions, but they also are capable of controlling them to their advantage. Willem Verbeke (verbeke@few.eur.nl) is a chaired professor of sales and account management at Erasmus University in Rotterdam, the Netherlands. He received his Ph.D. from the University of Pennsylvania. His research has appeared in a number of academic journals, including theJournal of Marketing, theInternational Journal of Research in Marketing, theJournal of Management, theJournal of Organizational Behavior, and theJournal of Applied Psychology. His area of research interests includes personal selling, sales management, emotions and emotion regulation, social capital, and knowledge management. Frank Belschak (belschak@few.eur.nl) is an assistant professor of marketing and organizational behavior at Erasmus University in Rotterdam, the Netherlands. He received his Ph.D. in organizational behavior from the University of Cologne in Germany. His current research interests include emotions and emotion regulation in organizations and across cultures, as well as social capital and networks. Richard P. Bagozzi (bagozzi@rice.edu) is the J. Hugh Liedtke Professor of Management in the Jesse H. Jones Graduate School of Management and a professor of psychology at Rice University in Houston, Texas. He conducts research on human emotions, the theory of action, goal setting and goal striving, and structural equation methods.     

Using a customer-Level marketing strategy to enhance firm performance: A review of theoretical and empirical evidence

It is becoming increasingly apparent from the literature that marketers need to consider customer-level information when they generate a marketing strategy for the firm. In this article, the authors develop a customer-focused framework that uses a marketing strategy with an overall objective of maximized financial performance. This strategy is driven by seven customer-level marketing tactics and shows how actual customer data can be used to generate an actionable marketing strategy leading to optimal levels of profitability, customer equity, and shareholder value. In addition, the authors discuss a successful implementation of this strategy for several business-to-business and business-to-consumer firms and offer insights as to how to customize an implementation strategy for any firm, along with presenting potential challenges a firm may encounter during the implementation process. Several suggestions for future research are offered to explore and harness this newly available evidence. V. Kumar (VK) (vk@business.uconn.edu) is the ING Chair Professor of Marketing and the executive director of the ING Center for Financial Services at the University of Connecticut. He spends his time by transferring his knowledge (however little it may be) to his two daughters about customer lifetime value, diffusion models, forecasting sales and market share, retailing, and marketing strategy. J. Andrew Petersen (apetersen@business.uconn.edu) is a doctoral candidate in marketing at the University of Connecticut. His research interests include customer lifetime value, word-of-mouth effects, and customer-level marketing strategy. His research has been published inMarketing Research Magazine and theJournal of the Academy of Marketing Science.