Search Conferences

Type in any word, words or author name. This searchs through the abstract title, keywords and abstract text and authors. You may search all conferences or just select one conference.

 All Conferences
 EMAC 2019 Annual Conference
 EMAC 2020 Annual Conference
 EMAC 2020 Regional Conference
 EMAC 2021 Annual Conference
 EMAC 2021 Regional Conference
 EMAC 2022 Annual
 EMAC 2022 Regional Conference

EMAC 2019 Annual Conference

Investors Horizons Matter for Marketing Expenditures, Even When CEO Compensation and Blockholders Are Taken into Account

Published: May 28, 2019


Andrew Zylstra, ESCP Europe


investors; advertising; CEOs


Despite the popular press’s widespread reporting of the negative effects of short-term investor pressure on top executives, there is little evidence concerning their effects on marketing spending decisions. Reasoning that business decisions taken in response to varying levels of short-term investors in firms affect discretionary budgets, we show that high investor turnover, our proxy for investor horizon, is associated with a higher probability to reduce marketing expenditures. We test the direction of causality to ensure that our results are not driven by firms with myopic management of marketing resources attracting short-term investors. We find that blockholders mitigate the effect of high investor turnover and that CEOs with higher long-vs-short term compensation do not mitigate the effect of short-term investors. This first study to assess short-term investors through a marketing lens reveals negative effects of short-term investor pressure on marketing expenditures. Rewards designed to ensure long-term shareholder loyalty may help reduce the myopic management of marketing expenditures.