The New Product Portfolio Innovativeness-Stock Returns Relationship: The Role of Large Individuals Investors' Culture
Journal of Marketing, Forthcoming
51 Pages Posted: 4 Mar 2019
Date Written: July 3, 2018
The marketing-finance interface literature has largely investigated the direct link between innovativeness and stock returns. In this paper, we move a step further investigating two key unanswered questions: How and under what conditions is innovativeness associated with stock returns? Answering these questions is important for marketing managers who have to defend innovation investments to board members and time the introductions of new products. To answer these questions, we investigate large individual investors and their national culture in one specific industry: food and beverage. Combining multiple datasets, we first investigate the relationship between innovativeness and large individual investor’s stock holding decisions (i.e., to sell or buy a firm’s stocks). The results indicate that national culture moderates the innovativeness-stock holding change relationship. At the stock market level, we show that large investors’ stock holding partially mediates the innovativeness-stock returns relationship and that the national culture of a firm’s large investors moderates this relationship. Hence, we unveil a special segment of investors, large individual investors, which influence the extent to which firms benefit from innovativeness in the stock market, at least in the food and beverage industry.
Keywords: marketing-finance interface, new product portfolio innovativeness, stock holding, investor heterogeneity, national culture, Hofstede
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