Is cause-related marketing a winning strategy? An event study analysis. Issue 1 (2nd January 2020)

• Record Type: Journal Article
• Authors: Das, Neel; McNeil, Chris; Pouder, Richard W.; Daly, Joseph P.
• Is Part Of: Journal of marketing theory and practice. Volume 28:Issue 1(2020)
• Page Start: 43
• Page End: 55
• Publication Date: 2020-01-02
• Subjects: Marketing -- Periodicals; Marketing research -- Periodicals; Marketing -- Périodiques; Marketing -- Recherche -- Périodiques; Marketing; Marketing research; Periodicals; 658.8005
• DOI: 10.1080/10696679.2019.1662313
• Languages: English
• ISSNs: 1069-6679

Abstract

ABSTRACT: Cause-related marketing (C-RM) is the fastest-growing category of U.S. sponsorship spending. However, extant research provides no examination of whether investments in C-RM are economically worthwhile. This event study of 127 cause-related announcements from 1991 through 2011 shows a mean cumulative abnormal return of .74% occurring after two trading days. This indicates that C-RM programs are a good investment on average. Cross-sectional analysis of returns reveals that abnormal returns are augmented when the cause is tied to a special product and when firms pledge an additional concurrent donation. But the returns are depressed when a firm has high free cash flow.