Stakeholders have long pressured firms to provide societal benefits in addition to generating shareholder wealth. Such benefits have traditionally come in the form of corporate social responsibility. However, many stakeholders now expect firms to demonstrate their values by expressing public support for or opposition to one side of a partisan sociopolitical issue, a phenomenon the authors call “corporate sociopolitical activism” (CSA). Such activities differ from commonly favored corporate social responsibility and have the potential to both strengthen and sever stakeholder relationships, thus making their impact on firm value uncertain. Using signaling and screening theories, the authors analyze 293 CSA events initiated by 149 firms across 39 industries, and find that, on average, CSA elicits an adverse reaction from investors. Investors evaluate CSA as a signal of a firm’s allocation of resources away from profit-oriented objectives and toward a risky activity with uncertain outcomes. The authors further identify two sets of moderators: (1) CSA’s deviation from key stakeholders’ values and brand image and (2) characteristics of CSA’s resource implementation, which affect investor and customer responses. The findings provide new and important implications for marketing theory and practice.

Event studies examine stock price movements around corporate events. These events can be voluntary firm announcements (e.g., new product introduction, alliance formation, channel restructuring) or announcements made by other entities such as regulatory bodies (e.g., FDA approval) or competitors (e.g., new market entry). The event study methodology was developed by finance researchers but has been widely adopted in other fields, including marketing. We review the manner in which event studies have been used in the marketing literature and summarize the current state of knowledge about the design and interpretation of event studies. We provide guidelines for researchers who use this methodology and for readers who draw inferences from results obtained from event studies, and we highlight a few areas where the methodology can be leveraged to help us better understand the financial value of marketing actions. Keywords Event study . Stock returns . Abnormal stock performance . Corporate announcements . Financial value of marketing actions 1 A smaller stream of literature examines long-term abnormal returns to events. We also review that literature and the methods that underlie it.J. Andrew Petersen served as Area Editor for this article.

Investors routinely follow firms’ communications and actions to form expectations about the firms’ future performance. The authors propose a set of firm and industry characteristics that influence the formation of investor expectations in the context of new product announcements. Specifically, they argue that positive expectations of future innovation output should cause an ex-ante increase in stock prices and a smaller ex-post market reaction when an actual new product is announced. Using a sample of 4,865 new product announcements made by 826 publicly traded U.S. firms, the authors show that the stock market reaction to a new product announcement measured in a five-day window around the announcement is negatively related to (1) the number of new products previously announced by the firm, (2) the average number of new products previously announced by the firm's competitors, and (3) the average sentiment of past public news about the firm. These three factors are also positively related to the market value of the firm measured immediately before each new announcement, controlling for increases in firm value directly attributable to past new product announcements. In contrast to many articles in the marketing literature that imply that the added value of a marketing event can be fully assessed from the stock market reaction to the announcement of the event, the authors clarify that for recurrent events or events that are part of a firm's broader strategy, this reaction reflects only an update of investors’ expectations of future firm performance.

Academia is a marketplace of ideas. Just as firms market their products with packaging and advertising, scholars market their ideas with writing. Even the best ideas will make an impact only if others understand and build upon them. Why, then, is academic writing often difficult to understand? By conducting two experiments and analyzing the text of 1640 articles in premier marketing journals, we show that scholars write unclearly in part because they forget that they know more about their research than readers, a phenomenon called “the curse of knowledge.” Knowledge, or familiarity with one’s own research, exacerbates three practices that make academic writing difficult to understand: abstraction, technical language, and passive writing. When marketing scholars know more about a research project, they use more abstract, technical, and passive writing to describe it. Articles with more abstract, technical, and passive writing are harder for readers to understand and are less likely to be cited. We call for scholars to overcome the curse of knowledge and provide two tools -- a website (writingclaritycalculator.com) and a tutorial -- to help them recognize and repair unclear writing so they can write articles that are more likely to make an impact.

Firms routinely use press releases to announce the launch of their new products. An examination of these press releases shows that in approximately 7% of cases, firms issue new product announcements concurrently with other corporate announcements. However, the consequences of these actions are unknown because event studies typically eliminate concurrent announcements in an attempt to avoid their confounding effects. The authors use a comprehensive sample of press releases issued by publicly traded U.S. firms to document the consequences of firms announcing the release of a new product concurrently with another corporate announcement that conveys good news. Drawing on Merton's (1987) model of capital market equilibrium with incomplete information, the authors identify three conditions that are conducive to the issuance of concurrent new product announcements. They then verify that under these conditions, the increase in shareholder value associated with concurrent announcements is higher than that associated with issuing two similar announcements separately. This research provides insights into how firms can leverage corporate communications to increase stock prices.