| Abstrakt: |
Sponsorship has quickly grown to be a preferred marketing medium for firms seeking to sharpen their marketing message (Deitz, Evans, and Hansen 2010). This is reflected in the fact that despite being in an age of diminishing marketing budgets, the growth of sponsorshiprelated expenditures has outpaced that of advertising and sales promotion in recent years and reached $44 billion in 2009 with projections of growth to $46 billion for 2010 (IEG 2009). This growth may be attributed to the stream of research examining the influence of sponsorship agreements on various consumer-based measures which demonstrate that sponsoring firms are rewarded with improved consumer attitudes and increased purchase intentions toward their products and services (McDaniel and Kinney 1998; Pullig, Netemeyer, and Biswas 2006). Despite the advancement of the examination of consumer-based measures to sponsorships, the examination of market-based reactions to sponsorships has lagged behind. Recent calls by senior marketing researchers (Hanssens, Rust, and Srivastava 2009; Reibstein, Day, and Wind 2009), in conjunction with the Marketing Science Institute's (MSI's) research priority to treat "the investor community as a customer" further emphasizes the necessity to understand investor-based decision making and their reaction to this popular and growing marketing initiative. Prior research examining investor reaction to sponsorship-related marketing investments has been limited to the application of event-study methodology by examining changes in stock price at and around the time of the sponsorship announcement (e.g., Cornwell, Pruitt, and Clark 2005; Farrell and Frame 1997; Miyazaki and Morgan 2001). Findings generally indicate that investors reward sponsoring firms with increases in stock price during various event windows around the date of announcement of the sponsorship agreement. However, the question remains as to whether or not investors reward sponsoring firms over the long-run. As such, this study sought to advance the marketing-finance literature by examining investor reaction to the announcement of official sports sponsorship agreements over a 13-month event window on an important firm financial metric: firm market liquidity. Firm market liquidity is defined as ". . . the ease with which it (firm stock) can be traded" (Brunnermeier and Pedersen 2009, p. 2201) and has also been defined as the relative attractiveness of a stock and ease of trading that stock (Chordia, Roll, and Subrahmanyam 2002). Firms with relatively higher market liquidity are able to access funds more quickly through the issuance of shares of stock and are able to do so with relatively lower costs than for firms with lower market liquidity. Investors are also able to trade shares of the stock more quickly and with relatively lower costs when compared to shares of firms with lower market liquidity. This study utilized two widely used measures from the finance literature to measure firm market liquidity, trading volume (Lipson and Mortal 2007) and relative effective spread (Chakravarty, Van Ness, and Van Ness 2005). Trading volume is defined as the number of shares of a security traded within a specified period of time (Pagano 1989) while relative effective spread is a function of the difference between the ask, the lowest price a market maker is willing to sell the security, and the bid, the highest price that a buyer is willing to pay for the security, relative to the price of the security. Higher trading volume and lower relative effective spreads indicate higher levels of firm market liquidity. Using 118 official sports sponsorship announcements from the National Football League (NFL), Major League Baseball (MLB), National Basketball Association (NBA), National Association for Stock Car Auto Racing (NASCAR), National Hockey League (NHL) and Professional Golf Association (PGA), sponsoring firms were examined for changes in trading volume and relative effective spread for the time period of t = -1 to t = +12 where t = 0 is the month of the official sports sponsorship announcement. Results indicate that firms that participate in official sports sponsorship have significantly higher average monthly trading volume ( t-score = 2.505; p < 0.05) and lower average monthly relative effective spreads (t-score = -3.754; p < 0.01) for the period examined. Further examination leads to the finding that firms with relatively lower levels of advertising intensity (total advertising expenditures (COMPUSTAT item XAD) / total firm assets (COMPUSTAT item AT)) seem to benefit more than for firms with relatively higher levels of advertising intensity, showing that firms with relatively smaller marketing budgets may be able to reap benefits which outweigh those of firms with relatively larger marketing budgets through the strategic investment of their marketing dollars. Theoretical and managerial implications are also discussed. References are available upon request. [ABSTRACT FROM AUTHOR] |
