The Impact of Brand Quality on Shareholder Wealth

This study examines the impact of brand quality on three components of shareholder wealth: stock returns, systematic risk, and idiosyncratic risk. The study finds that brand quality enhances shareholder wealth insofar as unanticipated changes in brand quality are positively associated with stock returns and negatively related to changes in idiosyncratic risk. However, unanticipated changes in brand quality can also erode shareholder wealth because they have a positive association with changes in systematic risk. The study introduces a contingency theory view to the marketing-finance interface by analyzing the moderating role of two factors that are widely followed by investors. The results show an unanticipated increase (decrease) in current-period earnings enhances (depletes) the positive impact of unanticipated changes in brand quality on stock returns and mitigates (enhances) their deleterious effects on changes in systematic risk. Similarly, brand quality is more valuable for firms facing increasing competition (i.e., unanticipated decreases in industry concentration). The results are robust to endogeneity concerns and across alternative models. The authors conclude by discussing the nuanced implications of their findings for shareholder wealth, reporting brand quality to investors, and its use in employee evaluation

Mean-Centering Does Not Alleviate Collinearity Problems In Moderated Multiple Regression Models

The cross-product term in moderated regression may be collinear with its constituent parts, making it difficult to detect main, simple, and interaction effects. The literature shows that mean-centering can reduce the covariance between the linear and the interaction terms, thereby suggesting that it reduces collinearity. We analytically prove that mean-centering neither changes the computational precision of parameters, the sampling accuracy of main effects, simple effects, interaction effects, nor the R2. We also show that the determinants of the cross product matrix X′X are identical for uncentered and mean-centered data, so the collinearity problem in the moderated regression is unchanged by mean-centering. Many empirical marketing researchers commonly mean-center their moderated regression data hoping that this will improve the precision of estimates from ill conditioned, collinear data, but unfortunately, this hope is futile. Therefore, researchers using moderated regression models should not mean-center in a specious attempt to mitigate collinearity between the linear and the interaction terms. Of course, researchers may wish to mean-center for interpretive purposes and other reasons. © 2007 INFORMS

Mean-Centering Does Not Alleviate Collinearity Problems in Moderated Multiple Regression Models

The cross-product term in moderated regression may be collinear with its constituent parts, making it difficult to detect main, simple, and interaction effects. The literature shows that mean-centering can reduce the covariance between the linear and the interaction terms, thereby suggesting that it reduces collinearity. We analytically prove that mean-centering neither changes the computational precision of parameters, the sampling accuracy of main effects, simple effects, interaction effects, nor the 2 . We also show that the determinants of the cross product matrix are identical for uncentered and mean-centered data, so the collinearity problem in the moderated regression is unchanged by mean-centering. Many empirical marketing researchers commonly mean-center their moderated regression data hoping that this will improve the precision of estimates from ill conditioned, collinear data, but unfortunately, this hope is futile. Therefore, researchers using moderated regression models should not mean-center in a specious attempt to mitigate collinearity between the linear and the interaction terms. Of course, researchers may wish to mean-center for interpretive purposes and other reasons.moderated regression, mean-centering, collinearity

Encouraging Best Practice In Quantitative Management Research: An Incomplete List Of Opportunities

The paper identities some common problems encountered in quantitative methodology and provides information on current best practice to resolve these problems. We first discuss issues pertaining to variable measurement and concerns regarding the underlying relationships among variables. We then highlight several advances in estimation methodology that may circumvent issues encountered in common practice. Finally, we discuss approaches that move beyond existing research designs, including the development and use of datasets that embody linkages across levels of analysis, or combine qualitative and quantitative methods. © Blackwell Publishing Ltd 2006

The Effect Of Interpersonal Trust, Need For Cognition, And Social Loneliness On Shopping, Information Seeking And Surfing On The Web

This study contends that certain personality traits of e-consumers have an affect on their shopping, surfing and information seeking behaviors on the Web. Specifically, it is proposed that e-consumers who are low on interpersonal trust are less likely to shop on the Web due to their heightened concerns with Web security. Similarly, an argument is made that e-consumers who enjoy cognitively demanding processing tasks are more likely to use the Web for information search. Finally, it is posited that social loners will be selectively drawn to Web surfing. Findings from an empirical study are presented which support these assertions. Implications of this study for marketers and future researchers are discussed

Alliance entrepreneurship and firm market performance

This paper extends entrepreneurship into the domain of alliances, and investigates the effect of alliance proactiveness on market-based firm performance (defined in terms of sales growth, market share, market development and product development). Alliance proactiveness is defined as the extent to which an organization engages in identifying and responding to partnering opportunities. The effect of alliance proactiveness on performance is tested within a contingency framework, with size and perceived environmental uncertainty as moderators, and using data from 182 firms. We estimated the model using partial least squares. Results indicate that alliance proactiveness leads to superior market-based performance, and that this effect is stronger for small firms and in unstable market environments. Copyright © 2001 John Wiley & Sons, Ltd. Entrepreneurship, which typically leads to new product introduction or market entry, creates value through association with the discovery and exploitation of profitable business opportunities, (Shane and Venkataraman, 2000; Lumpkin and Dess, 1996). In addition, entrepreneurial activities also create value when they facilitate ‘access relationships ’ to resources and capabilities that are strategic to competitiveness and performance (Stuart, 2000). Consequently, although extant literature has focused predominantly on entrepreneurship in product markets, entrepreneurial opportunities also exist in factor markets (Shane and Venkataraman, 2000; Schumpeter, 1934). Strategic factor markets have been defined as ‘market(s) where the resources necessary to implement a strategy are acquired ’ (Barney, 1986: 1231). For instance, the relevant strategic factor Key words: strategic alliances; entrepreneurship; proactiveness; partial least square

Empirical Generalizations From Brand Extension Research: How Sure Are We?

Bottomley and Holden [Bottomley, P.A., and Holden, S.J.S. (2001). Do we really know how consumers evaluate brand extensions? Empirical generalizations based on secondary analysis of eight studies. Journal of Marketing Research, 38, 494-500.] conducted a secondary analysis of Aaker and Keller\u27s [Aaker, D.A., and Keller, K.L. (1990). Consumer evaluations of brand extensions. Journal of Marketing, 54, 27-41.] seminal brand extension study and seven other close replications, generated several empirical generalizations, and hence called for a revision of the extant understanding of brand extension evaluations. We re-examine Bottomley and Holden\u27s conclusions. We prove analytically that the simple effects estimated by B&H are incorrect, thereby rendering some of their generalizations suspect. We re-analyze the same data using appropriate statistical techniques, and our new results clarify the understanding of how consumers indeed evaluate extensions. Specifically, we find that, although the simple effects of neither parent brand quality nor measures of fit affect evaluations of brand extensions, the interaction effects of parent brand quality with fit are important determinants of brand extension evaluations. We discuss the substantive implications of our findings and offer directions for future research. © 2006 Elsevier B.V. All rights reserved

The tale of uncertain choices: inclusion versus exclusion

This article investigates the effect of perceived uncertainty on two types of screening strategies–exclusion and inclusion. Results from five studies showed that perceived uncertainty increases the preference for exclusion strategy. Using both mediation and moderation methods, we find support for accuracy consideration as the driver underlying the effect of perceived uncertainty on screening strategy. Furthermore, we demonstrated a reversal of the relationship between perceived uncertainty and screening strategy by manipulating the consideration set size. While perceived uncertainty strengthened the preference for the exclusion strategy when forming smaller consideration sets, this relationship flipped when forming larger consideration sets. We also demonstrated the effects of perceived preference uncertainty on screening strategy over and above knowledge uncertainty, choice uncertainty, as well as dispositional attitude toward uncertainty. Finally, we demonstrated the generalisability of our results by analysing verbal protocol data from the TV game show Who Wants to Be a Millionaire?