The New Product Portfolio Innovativeness-Stock Returns Relationship: The Role of Large Individuals Investors' Culture

Journal of Marketing, Forthcoming

Bocconi University Management Research Paper No. 18

51 Pages Posted: 4 Mar 2019

See all articles by Paola Cillo

Paola Cillo

Bocconi University - Department of Management and Technology

David A. Griffith

Michigan State University

Gaia Rubera

Bocconi University

Date Written: July 3, 2018

Abstract

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

Suggested Citation

Cillo, Paola and Griffith, David A. and Rubera, Gaia, The New Product Portfolio Innovativeness-Stock Returns Relationship: The Role of Large Individuals Investors' Culture (July 3, 2018). Journal of Marketing, Forthcoming; Bocconi University Management Research Paper No. 18. Available at SSRN: https://ssrn.com/abstract=3346473

Paola Cillo (Contact Author)

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

David A. Griffith

Michigan State University ( email )

Agriculture Hall
East Lansing, MI 48824-1122
United States

Gaia Rubera

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

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