Marketing Accountability：The impact of Advertising Spending on Accounting information Quality

Time：March 3rd (Thursday) 10:30 -12noon

Location: Zhifuxuan, National School of Development, Peking U.

Speaker: Wang Rui, Associate Professor, Guanghua School of Management

 

Abstract：

Marketing research has shown how marketing actions directly influence shareholder value as measured by returns and risk. However, the intermediate mechanism with which investors assess the value of marketing actions in predicting future cash flows has been largely assumed away. This is a critical omission because the degree to which marketing managers can speak with their accounting and finance counterparts on common grounds (i.e., the financial accountability of marketing actions) depends on how well marketing can influence reported accounting metrics that investors consider critical to assessing firm value. One important accounting metric that matters to investors is reported earnings, which includes both cash as well as non-cash (accruals) components. We propose that one of the ways of demonstrating the intermediating mechanism that makes marketing actions accountable to shareholders is to investigate how the effect of marketing actions on stock return risk is mediated by the uncertainty of earnings (i.e., volatility in cash flows and accruals uncertainty). We show that greater advertising spending can help lower stock return risk by lowering volatility in cash flow as well as lowering accruals uncertainty. We also show that the effects of advertising spending on accounting metrics are contingent on industry competitiveness and firm size.

 

嘉宾简介：

王锐，现任北京大学光华管理学院市场营销系副教授，Journal of Business to Business Marketing编委会委员，Journal of Marketing特约审稿人。她在宾州州立大学获得市场营销学博士学位。王博士目前的研究专长包括公司高管研究，首席执行官（CEO）和市场营销执行官（CMO）研究，公司创新战略，社会网络研究，营销渠道管理，销售队伍管理，零售管理，电子商务公司研究等。她的多篇研究成果发表在许多国内外学术期刊上，包括Strategic Management Journal, The Chief Marketing Officer Journal等。