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Product Market Effects of Customer Referencing
|Title:||Product Market Effects of Customer Referencing|
product market benefits
|Date Issued:||31 Aug 2018|
|Abstract:||Customer referencing refers to the phenomenon that a firm intentionally reveals its connections to customers to raise its own reputation. In this paper, we rely on textual data about customer referencing in financial reports to examine the association between customer referencing and firms’ future product market performance. We first document that a substantial number of firms voluntarily reference customers in financial reports. We find that these firms have a better future performance, consistent with the notion that the customers being referenced certify product quality and enhance a firm’s reputation. We also find that the positive association is stronger for firms with a low reputation and those that are risky or facing high product market competition. These results further affirm the product quality certification and reputation enhancement roles of customer referencing. Our study provides new insight into how certification via inter-organizational relationships can be an intangible marketing asset.|
|Appears in Collections:||
11 Financial: Disclosure|
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