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Author
- Niket, Jindal (1)
- Rebecca J., Slotegraaf (1)
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Date issued
- 2023 (1)
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- true (1)
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Research shows that marketing investments play a pivotal role in a firm’s own bankruptcy. However, there are even more firms that are not confronting bankruptcy themselves yet face spillovers from a rival’s bankruptcy. For such firms, it remains unknown whether their marketing investments affect these spillovers. We show that, in contrast to their generally positive effects in other contexts, advertising and R&D can either help or harm in the context of bankruptcy spillovers. The difference hinges on the industry’s growth and concentration. Advertising decreases (increases) a firm’s stock return when its rival files for bankruptcy in a low- (high-) growth industry and R&D decreases (increases) the stock return in a low- (high-) concentration industry. |