Influence of CEOs' religious affiliations on firms' advertising spending and shareholder value

Hannah Oh (First Author), Yu Zhang (Participant Author), Jooseop Lim (Participant Author), John Bae (Participant Author), Imran S. Currim (Participant Author)

Research output: Contribution to journalJournal

4 Citations (Web of Science)

Abstract

Purpose This study aims to answer two unique related questions on the overarching relationship between a CEO's personal religious affiliation, the firm's advertising spending decision and its shareholder value. First, does the CEO's religious affiliation, a proxy for risk taking, influence the firm's advertising spending decision? Second, does the advertising spending decision mediate the relationship between the CEO's religious affiliation and the firm's shareholder value? Design/methodology/approach This study uses data on the religious affiliations of CEOs of publicly listed US firms, 1992-2014, from Marquis Who's Who; advertising spending and shareholder value from Compustat, and panel data-based regression models including CEO characteristics from ExecuComp, and firm-, industry- and time-based controls. Findings We find higher advertising spending levels for Protestant over Catholic-led firms, and advertising spending mediates the relationship between a CEO's religious affiliation and the firm's shareholder value. Research limitations/implications Marketing theory needs to incorporate the missing but fundamental effect of the CEO's religious affiliation-based values on decisions and outcomes. Practical implications Boards of Directors may need to align the CEO's and their firm's spending goals. Originality/value While previous studies focused on the influence of religious affiliation on consumers' attitudes and behavior, and executives' financial and R&D spending decisions, this study, to the best of the authors' knowledge, is the first to investigate the effect of a CEO's religious affiliation on the firm's advertising spending decision and its shareholder value.
Original languageEnglish
JournalEuropean Journal of Marketing
Issue numberEarly Access
DOIs
Publication statusPublished - 2020

Corresponding author email

iscurrim@uci.edu

Keywords

  • Advertising spending
  • CEO religion
  • Risk taking
  • Shareholder value

Indexed by

  • ABDC-A*
  • Scopus
  • SSCI

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