# The Effect of Marketing Investment on Firm Value and Systematic Risk

**Authors:** Musaab Mousa, Saeed Nosratabadi, Judit Sagi, Amir Mosavi  
**arXiv:** [2104.14301](https://arxiv.org/abs/2104.14301)  
**Date:** 2021-04-29  
**Summary page:** https://www.summarizepaper.com/en/paper/2104.14301v1/

## Key points

- Analyzing the financial benefit of marketing is important for practitioners and researchers
- Companies view marketing costs as investments that should generate profit
- Companies adopt innovative strategies to increase their value
- This study examines the impact of marketing investment on firm value and systematic risk in four Arabic emerging markets from 2010 to 2019
- Firm share price and beta share are used as measures of firm value and systematic risk, respectively
- Ownership concentration variable is considered as a moderator in the relationship between marketing investment and firm value/systematic risk
- Increasing investment in marketing has a positive effect on firm value valuation model
- Ownership concentration variable reinforces the relationship between marketing investment and firm value
- The variable also moderates systematic risk by aligning with the monitoring impact of controlling shareholders
- This study combines governance-marketing dimensions to interpret performance indicators in the capital market
- Provides comprehensive understanding of how factors interact within Arabic emerging markets
- Contributes to ongoing discussion on analyzing the financial benefit of marketing
- Highlights significance for companies looking to enhance their value
- Findings can inform practitioners' decision-making processes regarding marketing investments
- Provides valuable insights for researchers into understanding performance indicators in emerging markets.

## Summary

Analyzing the financial benefit of marketing is a critical topic for both practitioners and researchers. Companies view marketing costs as investments and expect them to generate returns in the form of profit. In order to increase their value, companies adopt various innovative strategies. This study aims to examine the impact of marketing investment on firm value and systematic risk in four Arabic emerging markets from 2010 to 2019. The study utilizes firm share price and beta share as measures of firm value and systematic risk, respectively. Additionally, the ownership concentration variable is considered as a moderator in the relationship between marketing investment and firm value/systematic risk, as it is known to be a determinant factor in these variables. Using panel data regression analysis, the findings reveal that increasing investment in marketing has a positive effect on the firm value valuation model. Furthermore, it is found that the ownership concentration variable reinforces the relationship between marketing investment and firm value. The variable also moderates systematic risk by aligning with the monitoring impact of controlling shareholders. This study provides valuable insights by combining governance-marketing dimensions to interpret performance indicators in the capital market. By examining the relationship between marketing investment, firm value, systematic risk, and ownership concentration, it offers a comprehensive understanding of how these factors interact within Arabic emerging markets. Overall, this research contributes to the ongoing discussion on analyzing the financial benefit of marketing and highlights its significance for companies looking to enhance their value. The findings can inform practitioners' decision-making processes regarding marketing investments and provide researchers with valuable insights into understanding performance indicators in emerging markets.