The Economic Relevance of Chief Marketing Officers in Firms’ Top Management Teams
Journal of Business & Economics Research – December 2013 Volume 11, Number 12
35 Pages Posted: 12 Sep 2014
Date Written: December 1, 2013
The presence of the Chief Marketing Officer (CMO) in the top management team (TMT) should translate into additional wealth creation for shareholders. Using performance attribution analysis, the authors construct a long-short portfolio that buys (sells) stocks of firms with (without) a CMO in the TMT and find this investment strategy would have earned risk-adjusted excess returns of approximately 3%. Additional analyses suggest the value of having a CMO in the TMT manifests primarily among firms with high operating margin, low asset turnover, high profitability, high R&D intensity and high advertising expenses. The authors conclude that having a CMO in the TMT has a positive impact on shareholder wealth.
Keywords: chief marketing officer, top management team, shareholder value, performance attribution analysis
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