Abstract
Despite significant research and progress in examining the effects of loyalty programs on consumer behavior and firm performance, the firm value implications of these programs are still unclear. The article investigates whether loyalty program introduction affects firm value, as measured by abnormal stock returns. The authors test the hypotheses empirically by conducting an event study of 260 announcements which cover 110 firms in the United States across different industries for 18 years from 2000 to 2017. Findings reveal that the introduction of loyalty programs, on average, positively influences firm value. The results of this study also reveal the existence of contingencies including synergies with complementary market-based assets and market conditions of lower uncertainty in determining the value of loyalty programs. The authors conclude that the value of loyalty programs is greater when the perceived risks of purchase are lower.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
