Date of Award


Degree Type


Degree Name

Doctor of Philosophy (PhD)



First Advisor

Naveen Donthu

Second Advisor

Yi Zhao

Third Advisor

Alok Saboo

Fourth Advisor

Lopo Rego


The explanatory power of earnings per share (eps) is on the decline as firms are focusing more on intangible assets and are disclosing more marketing metrics when they announce their earnings (e.g., subscribers for the telecom & media industry and monthly active users for social media industry). However, the performance of these marketing output metrics beyond market/analysts’ expectations (i.e., surprises) requires marketing resources, which may reduce current profitability but may also signal a higher future cash flow. Therefore, building on information economics, we assess if there is information content in marketing metric surprises, and how the stock market reacts to such surprises. Further, we argue that the information content of marketing metric surprises varies under different information signals by firms (strategic emphasis) and screening cues by investors (marketing expenditure). We also investigate the temporal variations in the effect of marketing metric surprises and also examine the relative importance of marketing metric surprises as compared to earnings surprises across multiple industries. We test the claims using an event study methodology around earnings announcement on S&P 1500 firms consisting of firms disclosing industry-specific marketing metrics and non-disclosing firms. We account for sample selection bias and correcting for potential endogeneity concerns of surprises marketing metrics. Our findings suggest that (1) although an increase in marketing metric surprise affects the stock market returns positively, (2) this effect is strengthened when firms signal strategic emphasis on value appropriation relative to value creation whereas (3) it is attenuated when investors screen for firms with higher unanticipated marketing expenditure, (4) the effect of marketing metric surprises increases over time whereas it decreases for earnings surprise, and (5) the effect of marketing metric surprise is higher in the telecom and media industry as compared to earnings surprises. The study helps to improve marketing accountability at the time of earnings announcement by improving the overall earnings quality of firms.


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