Do disclosures of customer metrics lower investors' and analysts' uncertainty but hurt firm performance?

Investors, analysts, and regulators frequently advocate greater disclosure of nonfinancial information, such as customer metrics. Managers, however, argue that such metrics are costly to report, reveal sensitive information to competitors, and therefore will lower future cash flows. To examine these counterarguments, this study presents the first empirical examination of the prevalence and consequences of backward- and forward-looking disclosures of customer metrics by manually coding 511 annual reports of firms in two industries, telecommunications (365 reports) and airlines (146 reports). The results reveal significant heterogeneity in the disclosure of customer metrics across firms and between industries. On average, in both industries, firms make more backward-looking than forward-looking disclosures. Notably, forward-looking disclosures of customer metrics are negatively associated with investors’ uncertainty in both industries and with analysts’ uncertainty in the telecommunications industry. Importantly, the results do not support the managerial thesis that such disclosures have a negative impact on future cash flows. </jats:p

Does Brand Licensing Increase a Licensor's Shareholder Value?

This study examines 171 brand licensing announcements and subsequent changes in the licensor firms' shareholder values using the event study method. We find that although brand licensing announcements lead to positive abnormal returns on average, nearly 44% of the announcements in our sample are followed by negative abnormal returns. We argue that investors react more favorably to a brand licensing announcement when they believe (i) the brand has greater ability to stimulate licensee product sales (and thus generate higher royalties for the licensor) and (ii) the licensor firm has greater ability to limit licensee opportunism (and thus limit brand dilution and its adverse effect on sales of other products marketed under the brand name). In line with our hypotheses related to a brand's ability to stimulate licensee product sales, the study's findings suggest that investors react more favorably to announcements involving brands with greater brand fit and greater brand breadth. However, investors appear to react less favorably to announcements involving brands with higher advertising investments. In line with our hypotheses related to a licensor firm's ability to limit licensee opportunism, the study's findings suggest that investors react more favorably to announcements involving larger licensors; however, investors' reactions do not appear to be influenced by licensor firms' licensing experience. This paper was accepted by Pradeep Chintagunta, marketing. </jats:p

Investors' evaluations of price-increase preannouncements

Several firms preannounce their price increases with the expectation that such announcements will be evaluated favorably by investors. However, little is known about the actual effect they have on shareholder value. Accordingly, the authors present the first systematic empirical examination of investors' evaluations of 274 price-increase preannouncements (PIPs). Results show that whereas the average increase in abnormal returns following a PIP is 0.51%, almost 41% of the PIPs result in negative abnormal returns. To explore this heterogeneity, the authors propose a conceptual framework that focuses on three key pieces of information that investors can use when evaluating a PIP: information on the nature (time to implementation and magnitude) of the preannounced price increase, the stated attribution for the preannounced price increase (demand and/or cost based), and information on prior PIP occurrences by the firm and its competitors. Results indicate that PIPs with greater time to implementation, higher own precedence and greater competitive precedence result in lower abnormal returns, while PIPs with higher magnitude and PIPs with an explicit demand attribution result in greater abnormal returns

Evaluation of computerized health management information system for primary health care in rural India

<p>Abstract</p> <p>Background</p> <p>The Comprehensive Rural Health Services Project Ballabgarh, run by All India Institute of Medical Sciences (AIIMS), New Delhi has a computerized Health Management Information System (HMIS) since 1988. The HMIS at Ballabgarh has undergone evolution and is currently in its third version which uses generic and open source software. This study was conducted to evaluate the effectiveness of a computerized Health Management Information System in rural health system in India.</p> <p>Methods</p> <p>The data for evaluation were collected by in-depth interviews of the stakeholders i.e. program managers (authors) and health workers. Health Workers from AIIMS and Non-AIIMS Primary Health Centers were interviewed to compare the manual with computerized HMIS. A cost comparison between the two methods was carried out based on market costs. The resource utilization for both manual and computerized HMIS was identified based on workers' interviews.</p> <p>Results</p> <p>There have been no major hardware problems in use of computerized HMIS. More than 95% of data was found to be accurate. Health workers acknowledge the usefulness of HMIS in service delivery, data storage, generation of workplans and reports. For program managers, it provides a better tool for monitoring and supervision and data management. The initial cost incurred in computerization of two Primary Health Centers was estimated to be Indian National Rupee (INR) 1674,217 (USD 35,622). Equivalent annual incremental cost of capital items was estimated as INR 198,017 (USD 4213). The annual savings is around INR 894,283 (USD 11,924).</p> <p>Conclusion</p> <p>The major advantage of computerization has been in saving of time of health workers in record keeping and report generation. The initial capital costs of computerization can be recovered within two years of implementation if the system is fully operational. Computerization has enabled implementation of a good system for service delivery, monitoring and supervision.</p

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