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This study aims to investigate the effect of stock repurchase – firms buying back their own stocks – on firm performance, focusing specifically on the role of marketing capability. The authors also investigate the moderating influence of competitive intensity on this effect. This research sheds light on how marketing capability explains the negative effect of stock repurchase on firm performance, and how this effect varies in different competitive intensity environments.

The authors test their hypotheses using US firm-level longitudinal data collected from a sample set of firms obtained from the Compustat database for the 1989–2015 period. The authors specify a panel data regression model to test the hypotheses.

The authors find that adoption of stock repurchase ultimately results in a decrease in firm performance, through a decrease in marketing capability. The authors also find that the indirect effect of stock repurchase on firm performance is moderated by firm competitive intensity, such that at higher levels of competitive intensity, the negative relationship between stock repurchase and marketing capability will become amplified and at lower levels of competitive intensity, the negative relationship between stock repurchase and marketing capability will get attenuated.

This study indicates that the risk from stock repurchase is the diversion of funds from other beneficial activities such as marketing budgets, leading to lowered marketing capability.

This study's results will help managers improve their understanding of the dark side of the stock repurchase strategy and help take corrective action.

The present study empirically tests the effects of stock repurchase on marketing capability and firm performance.

This study aims to determine the antecedents and consequences of information source choice to support a purchase decision for services high in experience attributes.

The authors conduct two studies to test their propositions. Study 1 is a single-category application using data from a national survey of 974 consumers who recently made a hotel-stay purchase/reservation. Correspondence analysis was used to identify search patterns, and regression analysis was used to identify their antecedents and influence on search outcomes. Study 2 is a cross-category study using data from a survey of 422 MTurk respondents reporting on search processes across six different services contexts, including hotel reservations. In this study, the authors seek generalization of their results to other services categories.

The authors identify four dimensions that characterize what information sources consumers, on average, use together when purchasing services. It is found that loyalty program membership and consistency in service delivery across a brand’s outlets for the brands in a consumer’s evoked set are important determinants of search patterns. Search patterns partially mediate the impact of consumer characteristics, choice context and choice set characteristics on search effort and, ultimately, on price paid.

An understanding of the factors that are associated with consumers’ choices of information sources and whether these choices are systematically related to search outcomes has implications for market segmentation and for marketers’ initiatives with respect to what information content to emphasize across sources.

The contribution is an understanding of the antecedents and consequences of consumer search patterns – and what information sources consumers tend to use together, considering the diversity of both internet and non-internet sources. There are limited insights in the services literature regarding how the internet impacts information search processes.