Marketing capability and the turnaround of financially distressed firms

Abhi Bhattacharya (), Joseph Johnson (), Ashkan Faramarzi (), Niket Jindal () and Ross W. Johnson ()
Additional contact information
Abhi Bhattacharya: University of Alabama
Joseph Johnson: University of Miami
Ashkan Faramarzi: UCLy, ESDES
Niket Jindal: University of Missouri
Ross W. Johnson: University of North Texas

Journal of the Academy of Marketing Science, 2024, vol. 52, issue 4, No 14, 1195-1215

Abstract: Abstract Financial distress befalls even well-managed firms, many of which find ways to turn around. Hence, it is pertinent to explore how distressed firms recover. Unfortunately, extant research sheds little light on the role of marketing in enabling distressed firms’ turnaround. Using a longitudinal dataset of U.S. firms, we empirically show that when the source of distress is firm-specific, it is marketing capability (as opposed to R&D and operations capabilities) that enables a turnaround. However, when distress is industry-driven, R&D capability is also beneficial. Further, although operations capability and cost-reduction actions do help distressed firms survive, they do not help firms regain financial well-being. Overall, these results highlight the importance of capabilities in the context of distressed firms and have implications for both firm managers and shareholders.

Keywords: Turnaround; Marketing capability; R&D capability; Operations capability; Financial distress (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11747-023-00985-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joamsc:v:52:y:2024:i:4:d:10.1007_s11747-023-00985-9

Ordering information: This journal article can be ordered from
https://www.springer ... gement/journal/11747

DOI: 10.1007/s11747-023-00985-9

Access Statistics for this article

Journal of the Academy of Marketing Science is currently edited by John Hulland, Anne Hoekman and Mark Houston

More articles in Journal of the Academy of Marketing Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().