Effects of advertising and R&D on spillovers from a rival’s bankruptcy
研究发现，广告和研发在竞争对手破产时对企业的股票回报有正面或负面影响，取决于行业增长和集中度。低增长行业中广告降低回报，高增长行业中则提升；低集中度行业中研发降低回报，高集中度行业中则提升。
Abstract Research shows that marketing investments play a pivotal role in a firm’s own bankruptcy. However, there are even more firms that are not confronting bankruptcy themselves yet face spillovers from a rival’s bankruptcy. For such firms, it remains unknown whether their marketing investments affect these spillovers. We show that, in contrast to their generally positive effects in other contexts, advertising and R&D can either help or harm in the context of bankruptcy spillovers. The difference hinges on the industry’s growth and concentration. Advertising decreases (increases) a firm’s stock return when its rival files for bankruptcy in a low- (high-) growth industry and R&D decreases (increases) the stock return in a low- (high-) concentration industry. Further, advertising has a stronger effect in a higher concentration industry. The results provide insight on how a firm’s advertising and R&D help or harm its value, should one of its rivals file for bankruptcy.