Explaining Marketing Capability and its Effect on Company's Short-/Long-Term Performance Using Accounting Variables

Badpa, Behrooz; Osta, Sohrab; Farokhinezhad, Mohammad-Reza

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year 13, Issue 52 (2021)

fa 2021, 13(52): 84-109

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Explaining Marketing Capability and its Effect on Company's Short-/Long-Term Performance Using Accounting Variables

Behrooz Badpa ^*

¹, Sohrab Osta

, Mohammad-Reza Farokhinezhad

1- Ilam University

Abstract: (2984 Views)

The marketing capability of a company, as one of the essentials of its success and survival, is comprised of a set of skills and knowledge that can improve company performance, and consequently increase its value, via identifying target markets, conducting customer needs assessment, addressing customer orientation, and utilizing resources. Accordingly, the present study aims to identify the accounting variables explaining the marketing capability of the company and its effect on operating revenue, return on assets, and stock prices. The statistical population includes the companies listed on the Tehran Stock Exchange in 2011-2020, selected using a screening of 100 companies as the study sample. In order to measure marketing capability, the stochastic frontier approach and the Stata 14 software are employed. The study findings at a 95% confidence level demonstrate that selling, general, and administrative expenses, trade receivables, intangible assets, cumulative sales volume, and retained earnings shape profit margin, and then explain the marketing capability of the company. As well, multivariate regression is utilized to test other research hypotheses, through combined data and the Eviews 9 software. The study findings at a 95% confidence level reveal that marketing capability has a significant positive effect on two performance variables in the company, viz. operating revenue and return on assets. In addition, such a significant positive impact can be observed on stock prices. Accordingly, the higher power and talent of the company in the field of marketing enriches its operating results and augments its value. Other research outcomes establish that the company’s financial leverage has a negative effect on its operating revenue, return on assets, and stock prices, but cash flows positively affect its operating revenue and stock prices. Furthermore, the ratio of market value to book equity in the company has a significant positive impact on its operating revenue and stock prices. The results of the present study can thus help managers in budgeting assets and expenses that affect company performance, aid investors in terms of successful stock selection, and even guide researchers in the fields of management and marketing.

Article number: 4

Keywords: Marketing Capability, Operating Revenue, Return on Assets, Stock Prices, Stochastic Frontier Approach.

Full-Text [PDF 593 kb] (123 Downloads)

Type of Study: Research | Subject: Special

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Badpa B, Osta S, Farokhinezhad M. Explaining Marketing Capability and its Effect on Company's Short-/Long-Term Performance Using Accounting Variables. fa 2021; 13 (52) : 4
URL: http://qfaj.mobarakeh.iau.ir/article-1-2568-en.html

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