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Firms spend considerable efforts to build brand awareness and associations among consumers. Yet there is a limited understanding of the financial returns of such investments. In this article, the authors present a framework that uses trademarks as measures of firms' branding efforts. They classify trademarks into two categories-brandidentification trademarks and brand-association trademarks-and propose that they are indicators of firm efforts to build brand awareness and associations among consumers, respectively. The authors then evaluate the chain of effects linking such assets with metrics of firms' financial value. A longitudinal analysis of data collected from secondary sources reveals that the stock (i.e., total number) of brand-association trademarks available to firms in time period t increases their cash flow, Tobin's q, return on assets, and stock returns and reduces their cash-flow variability in period t + 1. Furthermore, the authors observe that the stock of brand-identification trademarks owned by firms in period t -1 influences the effects of brand-association trademarks on cash flow, Tobin's q, and stock returns. Together, these findings provide useful insights into the financial value of branding.

Despite the positive societal implications of corporate social responsibility (CSR), there remains an extensive debate regarding its consequences for firm shareholders. This study posits that marketing capability plays a complementary role in the CSR–shareholder wealth relationship. It further argues that the influence of marketing capability will be higher for CSR types with verifiable benefits to firm stakeholders (i.e., consumers, employees, channel partners, and regulators). An analysis utilizing secondary information for a large sample of 1,725 firms for the years 2000–2009 indicates that the effects of overall CSR efforts on stock returns and idiosyncratic risk are not significant on their own but only become so in the presence of marketing capability. Furthermore, the results reveal that although marketing capability has positive interaction effects with verifiable CSR efforts—environment (e.g., using clean energy), products (e.g., providing to economically disadvantaged), diversity (e.g., pursuing diversity in top management), corporate governance (e.g., limiting board compensation), and employees (e.g., supporting unions)—on stock returns (and negative interaction effects with these CSR efforts on idiosyncratic risk), it has no significant interaction effect with community-based efforts (e.g., charitable giving).

a b s t r a c tExtant research in operations management has revealed divergent insights into the value potential of resource efficiency. While one view relates efficiency with good operations management and asserts that slack resources are a form of waste that should be minimized, the other view suggests that limited resource slack can impose heavy costs on firms by making them brittle. In this research, the authors build on these views to investigate the relationship of inventory, production, and marketing resource efficiency of firms with three metrics of financial performance (i.e., Stock-Returns, Tobin's Q, and Returns-onAssets). The authors evaluate the theoretical framework using secondary information on all U.S. based publicly-owned manufacturing firms across the 16-year time period of 1991-2006. Analysis utilizing a mixed-model approach reveals that a focus on resource efficiency is positively associated with firm financial performance. However, findings also support the arguments favoring slack, indicating that the financial gains from resource efficiency exhibit diminishing returns.

a b s t r a c tInventories represent an important strategic resource for firms, with implications for shareholder wealth. As such, firms expend considerable effort in managing their inventories efficiently. Among other factors, information technology (IT) capability can play an important role in enabling inventory efficiency and financial performance. However, insight into the chain-of-effects linking IT capability, inventory efficiency, and stock market returns and risk remains limited. In this paper, we provide a conceptual model outlining the relationships between these constructs. Next, we evaluate the model using secondary information on firms from multiple industries across the 10-year time period of 2000-2009. Our analysis confirms that firms' IT capability plays a significant role in enhancing their inventory efficiency, which, in turn, is observed to increase stock market returns. Our results also reveal that firms' IT capability directly reduces their stock market risk and enhances their stock market returns. Taken together, these findings, along with the conceptual model that we advance, have important research and managerial implications.

The rise in front‐end service outsourcing in recent years, despite its advantages, has also exposed buyer firms to unique challenges. One of the most salient risks for buyer firms in service triads is service failure due to the service provider. Indeed such service failures may be more costly for firms due to the greater relational and operational costs that may arise from the presence of the third‐party provider. Yet, neither the services literature nor extant operations literature on service triads has paid much attention to the financial consequences to the buyer firm – i.e., service risks – of such service failures in triads. To fill this gap, we investigate the financial penalty of service failures due to the service provider using the event study methodology and a sample of 146 customer information security breaches as our empirical context. Analysis of the abnormal returns reveals that service failures due to the front‐end service provider lead to greater shareholder losses than such failures due to the buyer firm. This provides important new insight into the financial risks arising from outsourcing front‐end services. Further, we investigate the ability of the buyer firm's employee and financial resources to temper these shareholder losses. We find that buyer firm employee productivity can moderate the greater financial penalty associated with such triadic service failures but that buyer firm leverage tends to not have such a mitigating effect. This provides new guidance for theory and practice regarding how buyer firms can position themselves to buffer the financial risks arising from service failures due to front‐end service providers.

This study investigates the influence of hospitals' physician contracting emphasis on patient care effectiveness and financial outcomes. It utilizes secondary data for a comprehensive set of hospitals in the United States over a 21‐year period (1996–2016). Analysis confirms that hospitals with a greater emphasis on physician contracting have higher operating margins but also tend to have longer patient length of stay—indicating lower patient care effectiveness. Lower patient care effectiveness, in turn, is observed to attenuate some of the financial gains from physician contracting. Further, post hoc analysis with other measures of patient care, including experiential quality, conformance quality, readmissions, and mortality provide additional insights into the effect of physician contracting on patient care. Theory and results also highlight teaching intensity and capacity utilization of hospitals as key boundary conditions in these relationships, revealing a complex set of findings related to these variables. Together, the findings yield practical insights for hospital managers regarding their operations strategy.

Whereas a growing body of research has examined the consumer-related implications of deceptive advertising, the stock market consequences stemming from the regulatory exposure of such infractions remain largely unexplored. In a step to address this gap, the current research examines the effect of regulatory reports of misleading ads on firm stock prices. Results from an event study, focusing on the pharmaceutical industry as the empirical context, show an average abnormal return of -0.91% associated with regulatory reports of deceptive advertising. Analysis of the abnormal returns, however, reveals that the stock market response to these reports is shaped by omission bias, in that investors penalize commission violations more than omission violations. Furthermore, firm reputation is found to moderate the penalty for commission violations. In addition, two experiments examine the effect of such violations on investor beliefs. The first helps elucidate the process mechanism underlying the observed stock market effects and the second provides insights regarding the reputation-omission bias interaction for firms committing repeat violations. Overall, our findings provide important theoretical, managerial, and public policy implications regarding the role of financial markets in regulating deceptive ad practices.deceptive advertising, omission bias, firm reputation, event study, experiment, pharmaceutical industry