Marketing capability, analyst recommendations, and firm value

This dissertation consists of two essays investigating the potential performance impact of marketing capability. The first essay focuses on the impact of marketing capability on analyst recommendations. Three hypotheses are developed to delineate the relationship between marketing capability and analyst recommendations. The result supports that marketing capability not only has a positive direct impact but also a stronger effect, relative to financing capability, on analyst recommendations for the firm. Furthermore, the direct effect of marketing capability on analyst recommendations is nonlinear. Pursuing an extremely high level of marketing capability may incur trade-off effects and result in unwanted outcomes. The effects of marketing capability are more pronounced in the condition of high market competition.;With the foundation established by the first essay, the second essay illustrates the potential mechanisms involved in the translation process of the value of marketing capability gap to product and stock markets. The marketing capability gap between a firm and its rivals represents the firm's competitive advantage. Two mechanisms, analyst coverage and market competition, are proposed to test their roles in revealing the value of marketing capability gap to the markets. In addition, this study examines the impact of marketing capability gap on multiple performance measures simultaneously. The analysis suggests that the product-market reaction to marketing capability gap differs from finance-market response. The result further indicates that analyst coverage helps the stock market recognize the value of marketing capability. Market competition facilitates the value recognition process to product market.;These two essays make several contributions to literature. First, they introduce the underresearched analyst recommendation metrics into marketing capability literature. Second, they propose and investigate potential mechanisms involved in influencing the business performance impacts of marketing capability level and gap. Third, this dissertation provides a novel perspective in demonstrating marketing accountability by analyzing a dataset collected from multiple archival databases with a nonparametric statistical tool, data envelopment analysis, to assess marketing capability.