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This paper investigates the relationship between the likelihood of accomplishing the revenue expectations and the use of firms’ advertising expenditures depending on firms’ growth properties. First, using the analysts’ revenue forecasts as a proxy of revenues expected by market participants, the test shows that growth firms spend more resources in their advertising activities to boost up their reported revenues than non-growth firms do. The paper also examines whether the effect of the interaction between the growth properties of firms and the use of advertising expenses on the probability of achieving analysts’ revenue forecasts can vary conditionally on firms’ business strategies. Empirical results display that the positive relation between growth firms and the probability of meeting or exceeding analysts’ revenue forecasts are statistically significant for cost leadership firms but not for differentiation firms. These findings suggest that unlike differentiators, cost leaders with growth properties are more likely to achieve favorable revenue surprises through advertising activities.

Variety in an assortment has been known to reduce the quantity perception of items. Individuals heavily rely on area cue when they perceive the quantity of items. People tend to perceive a single color or a shape unit as one area but the variety breaks up the areas into multiple colors or shape units. Little has been known about the mechanism underlying the relationship between the quantity perception and the variety. This research examined the cultural effects on the process of quantity perception and found that feminine cultural characteristics moderates the quantity perception when the area cues are associated with diverse colors.

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This study examines whether certain firm characteristics, specifically growth properties, are associated with the likelihood of achieving market expectations for revenues, as well as which mechanism (revenue manipulation or expectation management) growth firms utilize in order to avoid missing these expectations. The results show that growth firms are more likely to meet or exceed analyst revenue forecasts than non-growth firms. We also find that growth firms are more inclined to manipulate their reported revenues upwards, and less inclined to guide market expectations for revenues downward, in order to meet or beat expected revenues relative to non-growth firms. These findings suggest that window-dressing activities by growth firms may not be sustainable in the long-run and can misguide users of financial statements in their decision-making.