Dr. George Deitz Examines Corporate Social Responsibility with Shareholder Wealth in the Journal of the Academy of Marketing Science

MEMPHIS, TN—July 24, 2019. Dr. George Deitz, George Johnson Associate Professor of Marketing, along with former University of Memphis doctoral students Drs. Parker Woodroof and Robert Evans, Jr., had their article "Cause-Related Marketing and Shareholder Wealth: An Event Study Analysis" accepted for publication in the Journal of the Academy of Marketing Science. Based upon its Journal Impact Factor score (9.36), the journal was recently listed as the most influential in marketing and third most influential in all of business.

Cause-related marketing is a form of Corporate Social Responsibility (CSR) used by a growing number of firms. This strategy integrates promotion of a firm's products and services with social concerns and non-profit organizations favored by their consumers, communities, and other key stakeholders. Prior research in this area has focused mostly on consumers' attitudinal responses to cause-related marketing. Despite increased popularity of the practice, relatively little is understood about how cause-related marketing impacts actual consumer purchase behaviors or how this approach is viewed by investors.

In the study, the authors use econometric analysis to examine how the announcement of a cause-related marketing campaign by a publicly traded firm impacts stock prices. Study findings show that the stock market on average reacts negatively to news of cause-related marketing initiatives. This negative reaction is particularly strong for firms that make only a monetary contribution. However, when firms include some sort of in-kind contribution as part of the campaign – things like employee volunteerism, free products, services, and expertise, and other forms of material support, this negative effect is eliminated.

For firms with weak reputations and those with less available slack resources, inclusion of an in-kind contribution is especially important. The study also finds that the market is more receptive to cause-related marketing campaigns initiated by firms with stronger reputations, greater resource slack, and operating in more dynamic competitive contexts.

The final publication is available at link.springer.com shown below.



Deitz, G., Woodroof, P., Howie, K., Evans, Jr., R., "Cause-Related Marketing and Shareholder Wealth: An Event Study Analysis", Journal of the Academy of Marketing Science, 2019 available online.