The authors address the questions of whether and how corporate social responsibility (CSR) relates to firm performance and, in so doing, identify four mechanisms pertaining to this relationship: (1) slack resources lead to CSR (i.e., slack resources mechanism) (2) CSR improves performance (i.e., good management mechanism), (3) CSR makes amends for past corporate social irresponsibility (CSI) (i.e., penance mechanism), and (4) CSR insures against subsequent CSI (i.e., insurance mechanism). Using an integrative approach, the authors incorporate the four mechanisms in their empirical model specification. Specifically, to model the interplay among CSR, CSI, and firm performance and to test the four mechanisms simultaneously, they propose a structural panel vector autoregression specification. In support of the good management mechanism, results from an unbalanced panel data set of more than 4,500 firms and up to 19 years suggest that firms that engage in CSR are likely to benefit financially from their CSR investments. Moreover, the authors do not find support for the slack resources or the insurance mechanism. In contrast, and in support of the penance mechanism, often firms' CSR seems to trail their CSI. However, the results also suggest that the penance mechanism is ineffective in offsetting negative performance effects due to CSI.

The Chief Marketing Officer Matters!Marketing academics and practitioners alike remain unconvinced about the chief marketing officer's (CMO's) performance implications. Whereas some studies propose that firms benefit financially from having a CMO in the C-suite, other studies conclude that the CMO has little or no effect on firm performance. Accordingly, there have been strong calls for additional academic research regarding the CMO's performance implications. In response to these calls, the authors employ model specifications with varying identifying assumptions (i.e., rich data models, unobserved effects models, instrumental variable models, and panel internal instruments models) and use data from up to 155 publicly traded firms over a 12-year period (2000-2011) to find that firms can indeed expect to benefit financially from having a CMO at the strategy table. Specifically, their findings suggest that the performance (measured in terms of Tobin's q) of the sample firms that employ a CMO is, on average, approximately 15% greater than that of the sample firms that do not employ a CMO. This result is robust to the type of model specification used. Marketing academics and practitioners should find the results intriguing given the existing uncertainty surrounding the CMO's performance implications. The study also contributes to the methodology literature by collating diverse empirical model specifications that can be used to model causal effects with observational data into a coherent and comprehensive framework.

No abstract

Firms spend billions of dollars on advertising every year but remain uncertain about allocation across various advertising vehicles. Allocation decisions are even more complex as online advertising has proliferated and consumers’ media usage patterns have become more fragmented. To determine advertising effectiveness, the authors group firms’ advertising vehicle choices into three theoretically grounded and empirically verified smaller subsets: national, regional, and online advertising. Subsequently, they assess how the three advertising vehicles independently and jointly affect firm performance. Using 12 years of data covering 662 manufacturing firms, the authors find that while national, regional, and online advertising each have a positive and significant main effect on firm performance, each advertising vehicle weakens the effectiveness of the respective other two advertising vehicles (e.g., a 1% increase in online advertising increases firm performance by .32% but also decreases national [.15%] and regional [.03%] advertising effectiveness). A battery of robustness checks triangulates this result. Although all three media vehicles contribute to net increases in performance, the authors discuss the need to strategically integrate them to maximize combined effectiveness.

No abstract