Economic policy uncertainty and shareholder wealth: the role of marketing, operations, and R&D capabilities

Saurabh Mishra, Sachin B. Modi, Michael A. Wiles

Research output: Contribution to journalArticlepeer-review

Abstract

This study evaluates how economic policy uncertainty (EPU) affects firm shareholder wealth. It further investigates the moderating roles of marketing, operations, and R&D capabilities in this relationship. Analysis of longitudinal data, collected from a large sample of firms across multiple industries in the United States, reveals a complex picture. Results show that although EPU lowers firm value (i.e., Tobin’s Q and stock returns), it also reduces firm idiosyncratic risk. In addition, high marketing capability is observed to attenuate the loss in firm value arising from EPU, whereas high operations capability is seen to amplify this loss, with R&D capability not playing a significant moderating role. On the other hand, the reduction in idiosyncratic risk of firms facing EPU is marginally strengthened by operations and R&D capabilities, but not by marketing capability. Together, the conceptual framework and findings provide novel insight into the role of marketing capability in dealing with EPU.

Original languageEnglish (US)
JournalJournal of the Academy of Marketing Science
DOIs
StateAccepted/In press - 2022

Keywords

  • Economic policy uncertainty
  • Marketing capability
  • Operations capability
  • R&D capability
  • Shareholder wealth

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics
  • Marketing

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