—Using Stock Prices to Predict Market Events: Evidence on Sales Takeoff and Long-Term Firm Survival

Dmitri G. Markovitch () and Peter N. Golder ()
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Dmitri G. Markovitch: HEC-Paris, 78350 Jouy-en-Josas, France
Peter N. Golder: Stern School of Business, New York University, New York, New York 10012

Marketing Science, 2008, vol. 27, issue 4, 717-729

Abstract: We evaluate whether stock prices can predict the sales takeoff and the long-term survival of firms at takeoff. We find that abnormal returns are strongly positive in the year prior to takeoff, thus suggesting an important signal of the takeoff. Moreover, we find that negative abnormal returns in the year of takeoff and one year after takeoff increase the hazard of market exit by 9.5 times relative to firms without these negative abnormal returns. We discuss the implications of these findings for managers and researchers.

Keywords: sales takeoff; stock market forecast; event study; new product research; product life cycle; forecasting; product management (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:27:y:2008:i:4:p:717-729

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