Abstract
ABSTRACT Objective: drawing on voluntary disclosure theory, the paper’s main goal was to analyze the main effect of marketing intensity and the moderating role of life cycle on disclosure of marketing investments. Method: the sample includes 89 Brazilian companies listed on B3 stock exchange. We collected financial data from two sources, such as Economatica platform and in the explanatory notes and management report from the companies, which we coded through content analysis. We merged these two datasets and analyzed it using multiple linear regression. Results: both the marketing intensity and the life cycle of companies have effects on disclosure of marketing investments. In addition, the birth and growth phases moderate the main effect of marketing intensity, reducing the level of disclosure. This moderation is identified especially in disclosures of qualitative information. Conclusions: the findings support the voluntary disclosure theory based on arguments of judgment-based disclosure. Outcomes showed that when there is a high intensity of marketing investments, disclosure of marketing investments is managed by moving from the status of secrecy in companies in the birth and growth phases of life cycle to the status of differentiation resource in companies in the maturity phase of life cycle.
Highlights
For investors to be able to assess the impact of marketing strategies on performance, there must be marketing investment disclosure (Bayer, Tuli, & Skiera, 2017)
Equation 1 shows the direct relationship between the marketing investment intensity (MKTINVi) and the firm’s life cycle (LIFE_CICLEi) at the level of marketing investment disclosure (MKTDISCi)
The results indicate (a) that the disclosure of marketing assets is greater than the disclosure of future investments and long-term economic and financial results (t = 10.03, p < 0.01); (b) that the marketing investment disclosure is greater than the disclosure of future investments and long-term economic and financial results (t = 9.98, p < 0.01); and (c) that the disclosure of qualitative information is greater than the disclosure of quantitative marketing information (t = 9.34, p < 0.01)
Summary
For investors to be able to assess the impact of marketing strategies on performance, there must be marketing investment disclosure (Bayer, Tuli, & Skiera, 2017). Accounting standards do not require disclosure of the details of marketing investments, allowing each firm to determine the level of knowledge that investors will access about marketing strategies (Bayer et al, 2017). The marketing investment disclosure can be a differentiating feature because it allows investors to compare and evaluate competing companies, using information related to marketing activities as a sign of the quality of organizational management (Simpson, 2008) and the CEO’s stance (Koo & Lee, 2018). The marketing investment disclosure can ‘erode’ the organizational capacity to build and sustain competitive advantage, revealing organizational ‘secrets’ (Sidhu & Roberts, 2008), given that marketing investments are strategic actions and the publication of these data can trigger mimicry in competing companies (Mohamed & Schwienbacher, 2016)
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