This paper examines how firms’ emphasis on different areas of marketing strategy contributes to firm value in the face of increasing product market similarity. We argue that tangible and intangible strategic differentiators of marketing play asymmetrical roles. Intangible differentiators (i.e., promotion and customer relationship management (CRM) features) are primarily non-transactional and more difficult for rivals to replicate. In contrast, tangible differentiators (i.e., product, price, and place features) are largely transactional and may not provide a sustainable competitive advantage in markets with high product similarity. To test these predictions, we develop and validate textual measures of each marketing strategy area. Consistent with the predictions of the contingency framework, the results show that greater emphasis on promotion and CRM has a stronger value-enhancing effect when the firm’s product space is characterized by high versus low similarity, whereas no such effect is observed for product, price, and place features. However, an important boundary condition exists: the stronger value-enhancing effect of intangible differentiation in high-similarity industries is attenuated when firms face high financial distress, which tends to increase uncertainty about the future benefits of these differentiators. Our findings provide new insights into the complex and dynamic nature of investors’ valuation of firms’ marketing strategies amid accelerating commoditization.
This paper develops and tests a theory of how presidents use government agencies to manage legislative coalitions in multiparty presidential systems. We argue that agency decisions-particularly subsidized credit from state-owned development banks-function as retail coalition goods that sustain legislative support. Legislators are more likely to back the president when agency resources benefit subnational politicians who are both partisan allies and vital to their reelection networks. Using a regression discontinuity design based on close mayoral elections in Brazil and loan-level data from the National Development Bank (BNDES), we find that municipalities governed by coalition-aligned mayors receive significantly more favorable loan terms. Linking these data to roll-call votes, we show that legislators become more supportive of the president after loans are granted in their electoral strongholds managed by co-partisan mayors. These findings reveal how distributive agency decisions translate into legislative support, integrating bureaucratic discretion into theories of coalition management.
Macroeconomic forces are challenging the ability of audit firms to sustain engagement profitability. Although one available strategy for multinational clients is to employ non-U.S. firms as component auditors (CAs), the impacts of this choice are unclear. We investigate the influence of CAs on engagement economics in Big 6 audits from 2012 to 2022, a period of increasing non-U.S. labor use. Results show that global hours increase with CA participation, suggesting that additional CA labor is needed to substitute for each U.S. hour. Global billing rates decline, implying that principal auditors share savings from lower cost labor with clients. However, U.S. lead team realizations rise with increasing substitution of non-U.S. labor, incentivizing more extensive CA use. Further analysis shows that these impacts are concentrated in engagements with high CA participation in countries with low wages and low English proficiency. Audit quality is not reduced by greater substitution of non-U.S. labor.
The rapid expansion of electricity to rural Iran following the 1979 Islamic Revolution provides a unique opportunity to study the impact of infrastructure on women's empowerment. Using a large panel of villages observed in three consecutive censuses (1986, 1996, 2006) and administrative records on electrification, we apply difference-in-differences to estimate the effect of electrification on the gender literacy gap. Our estimates suggest that between 1986 and 1996, electrification accounted for about 78 percent of the observed decline. Evidence points to two channels: the expansion of educational infrastructure and the diffusion of labor-saving appliances, particularly refrigerators. These gains occurred while the state was actively reinforcing traditional gender roles, underscoring the power of development policy to advance women's education even in contexts where laws and norms restrict their autonomy.
The development of electronic commerce is transforming traditional business transition trends, including real estate market, with sellers can now post house information accessible worldwide, and buyers can use filters to narrow choices, place offers, and sign contracts digitally. The COVID-19 pandemic has further boosted e-commerce adoption, but also caused economic crises, like housing shortage, which lead to buyers making hasty financial decisions, such as overpaying for real estate. To support efficient real estate decision-making during economic crises, we developed a framework with a dynamic Hierarchical Network-based Influence Estimating System grounded in Social Comparison Theory and Bronfenbrenner’s Ecological Systems Theory. This framework helps determine house offer-to-listing price differences, offering both online and offline house sellers and buyers insights into the value of a house, while providing financial researchers and policymakers with useful population-level analytics and forecasting metrics. We take the real estate data for evaluation and the results demonstrate that our framework outperforms all the benchmarks.
