The Long-Term Impact of New-Product Introductions and Promotions on Financial Performance and Firm Value

48 Pages Posted: 5 Mar 2003

See all articles by Koen H. Pauwels

Koen H. Pauwels

Ozyegin University

Jorge M. Silva-Risso

University of California, Riverside (UCR) - A. Gary Anderson Graduate School of Management

Shuba Srinivasan

Boston University - Questrom School of Business

Dominique M Hanssens

University of California, Los Angeles (UCLA) - Anderson School of Management

Date Written: February 4, 2003

Abstract

Year after year, managers strive to improve financial performance and firm value by marketing actions such as new product introductions and promotional incentives. The current study investigates the short-term and long-term impact of such marketing actions on financial metrics, including top-line, bottom-line and stock market performance. While product introductions increase long-term financial performance and firm value, promotions do not. Managers may use these results to justify product innovation efforts and to weight short-term and long-term consequences of promotional incentives.

Suggested Citation

Pauwels, Koen H. and Silva-Risso, Jorge M. and Srinivasan, Shuba and Hanssens, Dominique M, The Long-Term Impact of New-Product Introductions and Promotions on Financial Performance and Firm Value (February 4, 2003). Tuck School of Business Working Paper No. 03-05. Available at SSRN: https://ssrn.com/abstract=385245 or http://dx.doi.org/10.2139/ssrn.385245

Koen H. Pauwels (Contact Author)

Ozyegin University ( email )

Kusbakisi Cd. No: 2
Altunizade, Uskudar
Istanbul, 34662
Turkey

HOME PAGE: http://www.marketdashboards.com

Jorge M. Silva-Risso

University of California, Riverside (UCR) - A. Gary Anderson Graduate School of Management ( email )

Riverside, CA 92521
United States

Shuba Srinivasan

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States
6173535978 (Phone)
6173534098 (Fax)

HOME PAGE: http://smgnet.bu.edu/mgmt_new/profiles/SrinivasanShuba.html

Dominique M Hanssens

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
310-825-4497 (Phone)
310-206-7422 (Fax)

HOME PAGE: http://www.anderson.ucla.edu/faculty/dominique.hanssens/

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