As part of the Marketing Distinguished Speaker series, the Area of Marketing welcomed Dr. Venkatesh Shankar, a professor of marketing at Texas A&M University. Shankar presented on his working paper, "The Impact of Shifting New Product Development to Emerging Markets on Shareholder Value," to Rawls College marketing faculty members and Ph.D. students on Wednesday April 19.
"It was very inspiring to listen to Dr. Venky's Shankar's experience since his early days as a Ph.D. student at Northwestern to developing into a distinguished scholar in the field of marketing. His deep insights and advice about solid scholarship are very valuable to all of us," said Kiran Pedada, Rawls College marketing PhD candidate.
The abstract of Shankar's paper is as follows:
Global firms are increasingly shifting new product development (NPD) to large emerging markets, such as India and China. However, little is known about the effectiveness of shifting NPD (e.g., opening a new NPD center, expanding an existing NPD center, hiring specialized R&D employees in a foreign country). What are the short-term effects on shareholder value of shifting NPD to emerging markets? What are the determinants of these effects? We develop a conceptual framework and hypotheses related to these important questions and test them using a uniquely compiled dataset of 348 announcements of 102 publically traded North American-headquartered global companies who shifted some of their NPD activities to India during 1991-2013. Our analysis reveals important insights. Our results show important asymmetries regarding the impact of emerging market shift of NPD on shareholder value. Investment amount (relative local employee size) is negatively (not significantly) related to short-term abnormal returns. However, the effect of investment amount and relative local employee size on shareholder value are moderated by employee quality emphasis, costs savings emphasis, development scope and prior profitability. Employee quality emphasis has a positive moderating effect on both investment amount---short-term abnormal returns, and relative local employee size--short-term abnormal returns relationships. Cost savings emphasis has a positive moderating effect on the relationship between investment amount and short-term abnormal returns, but no effect on the relationship between relative local employee size and short-term abnormal returns. Development scope (prior profitability) has a positive (negative) moderating effect on the investment amount-abnormal return relationship.
To view pictures from the event, please visit the Rawls College Flickr account.
For more information regarding the Marketing Distinguished Speaker Series, please contact Dr. Dass at firstname.lastname@example.org.This supports the efforts outlined in the Rawls College of Business Strategic Plan. Learn more about the LEADER 2020 Strategic Plan and follow our progress on Twitter at #RawlsLeads.