Dynamic marketing productivity and firm intangible value: insights from airlines industry

Abstract

ABSTRACT Given increasing pressure from shareholders to demonstrate how productively marketing resources and expenditures are being managed, several theoretical and empirical studies have demonstrated how to measure marketing productivity in recent decades. However, no study thus far has provided any empirical evidence pertaining to the financial implications of marketing productivity. This study attempted to fill this conspicuous lacuna in the literature. Drawing propositions from the resource-based view (RBV) and dynamic capabilities theory, this research puts forward the notion of dynamic marketing productivity (DMP) and argues that dynamic marketing productivity (DMP) can be a source of competitive advantage, thereby positively affecting a firm’s financial performance. Drawing samples from the US-based airlines industry, this study demonstrates that the level of a firm’s dynamic marketing productivity positively affects a firm’s intangible value as measured by Tobin’s q and market value added (MVA). The results are robust to alternative measures of firm intangible value as well as alternative methods of estimations.