Product Design Awards and The Market Value of The Firm

Abstract

P roduct design has increasingly been recognized as an important source of competitive advantage. This study empirically estimates the impact of effective design on the market value of the firm. We use a firm's receipt of a product design award as a proxy for its design effectiveness. Based on data from 264 announcements of design awards given to commercialized products between 1998 and 2011, we find that award announcements are associated with statistically significant positive stock market reactions. Depending on the benchmark model used to estimate the stock market reaction, the market reaction over a two-day period (the day of announcement and the preceding day) ranges from 0.95% to 1.02%. The market reaction is more positive for smaller firms and for firms whose award winning products are consumer goods. However, a firm's growth potential, industry competitiveness, and whether a firm is a first time or repeated award winner do not significantly affect the market reaction.

New Product Introduction Prize (NPIP) and the Market Value of the Firm: An Empirical Investigation into the Computer, Electronic and Communication Industry (CECI)

“…This result supports Hypothesis 1. The magnitude of positive stock market reaction portrayed by this research is consistent with the mean CAR obtained by other studies which investigated into stock market reaction to new events or information: 0.75% [15], 0.96% [42], 0.63% [43], 0.39% [44], 2.72% [45] and 1.21% [32].…”

“…It has been postulated that large-sized firms experience lower abnormal returns as a result of new product launches or being awarded a prize [30], [31]. [32] explain that the anticipation of information about large-sized firms is often higher than small-sized firms. As such, the media, financial experts and other industry players provide more attention to large-sized firms.…”

“…Hence, this study adopts the Fortune World's Most Admired Companies rankings as the measure of reputation. Consistent with other studies [32], [50], missing values were replaced with the industry average reputation sore.…”

The Effect of Information Technology on Organizational Performance: The Mediating Role of Quality Management Capabilities

“…Product Design: can be defined as creating a new product to be sold to the organization's customers. Such abstract concept, it is essentially the efficient and effective generation and development ideas through process that lead to new products (Xia et al, 2015). This dimension will be measured using questions (17-20) in the questionnaire.…”

Investigating the Product Quality Attributes That Influence Customers Satisfaction of Online Apparels.

“…Xia, Singhal, and Peter Zhang (2016) argued that individual perceives dimensions of reliability and conformance for the product similarly. However, there are slightly different for both dimensions since conformance is about the magnitude for products" design and characteristics of functionality capable to achieve pre-established standards and industry specification (Bubonia, 2014;Xia et al, 2016). Therefore, conformance normally related to manufacturing-based approach.…”