Marketing with (or without) research and development: strategic investment drivers of sustained firm performance
DOI:
https://doi.org/10.1108/RAUSP-07-2024-0152Palabras clave:
R&D investment, Marketing-finance interface, Resource allocation, Profitability, Competitive advantageResumen
PurposeHow can companies balance marketing and research and development (R&D) to sustain competitive advantage through performance? Although these resources are widely recognized as key strategic investments, it remains unclear under what conditions and time frames they generate sustained impacts on firm performance. This study aims to examine the individual and combined impacts of marketing and R&D on market share and profitability over time, while accounting for prior performance levels.
Design/methodology/approachUsing 18 years of panel data, the authors examine how marketing and R&D investments affect market share and return on assets over a four-year period and under four distinct prior performance conditions.
FindingsMarketing yields rapid market-share gains but loses strength over time, whereas R&D offers slow yet steady improvements in market share and profitability. Joint investments yield modest but consistent profit gains, particularly when firms previously had low market power and high profit efficiency. Marketing, either alone or in combination with R&D, enhances future profitability for firms that previously had weak market power and efficiency, whereas firms strong in both dimensions face diminishing returns.
Research limitations/implicationsThe evidence clarifies how marketing and R&D investments dynamically shape firm performance, offering a more precise understanding of their interaction and sustainability.
Practical implicationsManagers can use these insights to allocate financial resources strategically, thereby optimizing both short-term and long-term performance.
Social implicationsEmpowering companies to harness sources of competitive advantage improves sustained performance, thereby enhancing firm-level competitiveness and the persistence of profitability over time.
Originality/valueThis research uniquely integrates marketing and R&D investment strategies, demonstrating how their interplay, contingent on prior performance, sustains long-term competitive advantage.
Descargas
Referencias
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. [https://doi.org/10.1177/014920639101700108](https://doi.org/10.1177/014920639101700108)
Bhattacharya, A., Morgan, N.A., & Rego, L.L. (2022). Examining why and when market share drives firm profit. Journal of Marketing, 86(4), 73-94. [https://doi.org/10.1177/00222429211031922](https://doi.org/10.1177/00222429211031922)
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. [https://doi.org/10.1177/014920639101700108](https://doi.org/10.1177/014920639101700108)
Bhattacharya, A., Morgan, N.A., & Rego, L.L. (2022). Examining why and when market share drives firm profit. Journal of Marketing, 86(4), 73-94. [https://doi.org/10.1177/00222429211031922](https://doi.org/10.1177/00222429211031922)
Bouaziz, Z. (2016). The impact of R&D expenses on firm performance: Empirical witness from the Bist technology index. Journal of Business Theory and Practice, 4(1), 51-60. [https://doi.org/10.22158/jbtp.v4n1p51](https://doi.org/10.22158/jbtp.v4n1p51)
Boulding, W., & Staelin, R. (1990). Environment, market share, and market power. Management Science, 36(10), 1160–1177. [https://doi.org/10.1287/mnsc.36.10.1160](https://doi.org/10.1287/mnsc.36.10.1160)
Capon, N., Farley, J.U., & Hoenig, S. (2012). Toward an integrative explanation of corporate financial performance. Springer Science & Business Media.
Chakravarty, A., & Grewal, R. (2011). The stock market in the driver’s seat! Implications for R&D and marketing. Management Science, 57(9), 1594–1609. [https://doi.org/10.1287/mnsc.1110.1317](https://doi.org/10.1287/mnsc.1110.1317)
Chen, J.L. (2012). The synergistic effects of IT-enabled resources on organizational capabilities and firm performance. Information and Management, 49(3–4), 142–150. [https://doi.org/10.1016/j.im.2012.01.005](https://doi.org/10.1016/j.im.2012.01.005)
Chen, P.C., Chan, W.C., Hung, S.W., Hsiang, Y.J., & Wu, L.C. (2016). Do R&D expenses matter more than those of marketing to company performance? The moderating role of industry characteristics and investment density. Technology Analysis and Strategic Management, 28(2), 205–216. [https://doi.org/10.1080/09537325.2015.1093107](https://doi.org/10.1080/09537325.2015.1093107)
Chen, S., & Habibi, M. (2023). A temporal approach to innovation management in recessionary times. Industrial Marketing Management, 113, 215-231. [https://doi.org/10.1016/j.indmarman.2023.06.007](https://doi.org/10.1016/j.indmarman.2023.06.007)
Coase, R. (1937). The nature of the firm. Economica, 4(16), 386-405. [https://doi.org/10.1111/j.1468-0335.1937.tb00002.x](https://doi.org/10.1111/j.1468-0335.1937.tb00002.x)
Cowling, M., Liu, W., & Vorley, T. (2024). Who has an R&D investment opportunity? Who goes ahead? How much do they invest? R&D Management, 55(2), 326-340. [https://doi.org/10.1111/radm.12700](https://doi.org/10.1111/radm.12700)
Cyert, R. M., & March, J. G. (1963). A Behavioral theory of the firm. Prentice-Hall.
Davcik, N., & Grigoriou, N. (2019). How an unequal intra-firm resources distribution affect market share. Marketing Intelligence and Planning, 38(2), 167–180. [https://doi.org/10.1108/MIP-03-2019-0170](https://doi.org/10.1108/MIP-03-2019-0170)
Davcik, N. S., & Sharma, P. (2016). Marketing resources, performance, and competitive advantage: A review and future research directions. Journal of Business Research, 69(12), 5547-5552. [https://doi.org/10.1016/j.jbusres.2016.04.169](https://doi.org/10.1016/j.jbusres.2016.04.169)
Dekimpe, M.G., & Hanssens, D.M. (1995). Empirical generalizations about market evolution and stationarity. Marketing Science, 14(3), G109-G121. [https://doi.org/10.1287/mksc.14.3.G109](https://doi.org/10.1287/mksc.14.3.G109)
Dekimpe, M.G., & Hanssens, D.M. (1999). Sustained spending and persistent response: A new look at long-term marketing profitability. Journal of Marketing Research, 36(4), 397-412. [https://doi.org/10.1177/002224379903600401](https://doi.org/10.1177/002224379903600401)
Drechsler, W., Natter, M., & Leeflang, P.S.H. (2013). Improving marketing’s contribution to new product development. Journal of Product Innovation Management, 30(2), 298–315. [https://doi.org/10.1111/j.1540-5885.2012.01010.x](https://doi.org/10.1111/j.1540-5885.2012.01010.x)
Edeling, A., & Himme, A. (2018). When does market share matter? New empirical generalizations from a meta-analysis of the market share–performance relationship. Journal of Marketing, 82(3), 1-24. [https://doi.org/10.1509/jm.16.0250](https://doi.org/10.1509/jm.16.0250)
Ehie, I.C., & Olibe, K. (2010). The effect of R&D investment on firm value: An examination of US manufacturing and service industries. International Journal of Production Economics, 128(1), 127–135. [https://doi.org/10.1016/j.ijpe.2010.06.005](https://doi.org/10.1016/j.ijpe.2010.06.005)
Farris, P., Bendle N., Pfeifer, P., & Reibstein, D. (2010). Marketing metrics: The definitive guide to measuring marketing performance. Pearson Education.
Foxall, G. R. (1988). Marketing new technology: Markets, hierarchies, and user‐initiated innovation. Managerial and Decision Economics, 9(3), 237-250. [https://doi.org/10.1002/mde.4090090309](https://doi.org/10.1002/mde.4090090309)
Foxall, G. R. (2020). The theory of the marketing firm. Managerial and Decision Economics, 41(2), 164-184. [https://doi.org/10.1002/mde.3047](https://doi.org/10.1002/mde.3047)
Foxall, G.R. (2021). The theory of the marketing firm: Responding to the imperatives of consumer-orientation. Springer Nature.
Foxall, G.R., Oliveira-Castro, J.M, & Porto, R.B. (2021). Consumer behavior analysis and the marketing firm: Measures of performance. Journal of Organizational Behavior Management, 41(2), 97-123. [https://doi.org/10.1080/01608061.2020.1860860](https://doi.org/10.1080/01608061.2020.1860860)
Foxall, G. R., Oliveira-Castro, J. M., & Porto, R. B. (2025). Consumer behavior analysis as a foundation of operant behavioral economics. In: Reed, D, Kaplan, B., & Gilroy, S. (Eds.), Handbook of operant behavioral economics: Demand, discounting, method, and application (pp. 323–345). Academic Press. [https://doi.org/10.1016/B978-0-323-95745-8.00012-2](https://doi.org/10.1016/B978-0-323-95745-8.00012-2)
Gavetti, G., Greve, H. R., Levinthal, D. A., & Ocasio, W. (2012). The behavioral theory of the firm: Assessment and prospects. Academy of Management Annals, 6(1), 1–40. [https://doi.org/10.5465/19416520.2012.656841](https://doi.org/10.5465/19416520.2012.656841)
Griffin, A., & Hauser, J.R. (1996). Integrating R&D and marketing: A review and analysis of the literature. Journal of Product Innovation Management, 13(3), 191-215. [https://doi.org/10.1016/0737-6782(96)00029-2](https://doi.org/10.1016/0737-6782(96)00029-2)
Grimpe, C., Sofka, W., Bhargava, M., & Chatterjee, R. (2017). R&D, marketing innovation, and new product performance: A mixed methods study. Journal of Product Innovation Management, 34(3), 360–383. [https://doi.org/10.1111/jpim.12366](https://doi.org/10.1111/jpim.12366)
Hanssens, D.M., Wang, F., & Zhang, X.P. (2016). Performance growth and opportunistic marketing spending. International Journal of Research in Marketing, 33(4), 711-724. [https://doi.org/10.1016/j.ijresmar.2016.01.008](https://doi.org/10.1016/j.ijresmar.2016.01.008)
Hantula, D.A. (2001). Schedules of reinforcement in organizational performance, 1971–1994: Application, analysis, and synthesis. In: Johnson, C., Redmon, W., & Mawhinney, T. (Eds.), Handbook of Organizational Performance: Behavior Analysis and Management (pp. 139-166). Routledge.
Huang, J. (2015). Effects of advertising and R&D expense on enterprise performance. In: Proceedings of the 2015 Joint International Social Science, Education, Language, Management and Business Conference (pp. 111-119). Atlantis Press. [https://doi.org/10.2991/jisem-15.2015.24](https://doi.org/10.2991/jisem-15.2015.24)
Hughes, M., Hughes, P., Yan, J., & Sousa, C.M.P. (2019). Marketing as an investment in shareholder value. British Journal of Management, 30(4), 943–965. [https://doi.org/10.1111/1467-8551.12284](https://doi.org/10.1111/1467-8551.12284)
Jablonsky, S.F., & DeVries, D.L. (1972). Operant conditioning principles extrapolated to the theory of management. Organizational Behavior and Human Performance, 7(2), 340-358. [https://doi.org/10.1016/0030-5073(72)90021-9](https://doi.org/10.1016/0030-5073(72)90021-9)
Karna, A., Mavrovitis, C., & Richter, A. (2022). Disentangling reciprocal relationships between R&D intensity, profitability, and capital market performance: A panel VAR analysis. Long Range Planning, 55(5), 102247. [https://doi.org/10.1016/j.lrp.2022.102247](https://doi.org/10.1016/j.lrp.2022.102247)
Katsikeas, C.S., Morgan, N.A., Leonidou, L.C., & Hult, G.T.M. (2016). Assessing performance outcomes in marketing. Journal of Marketing, 80(2), 1-20. [https://doi.org/10.1509/jm.15.0287](https://doi.org/10.1509/jm.15.0287)
Koshksaray, A.A., Quach, S., Trinh, G., Keivani, S.B., & Thaichon, P. (2023). Brand competitiveness antecedents: The interaction effects of marketing and R&D expense. Journal of Retailing and Consumer Services, 75(11), 103532. [https://doi.org/10.1016/j.jretconser.2023.103532](https://doi.org/10.1016/j.jretconser.2023.103532)
Krasnikov, A., & Jayachandran, S. (2008). The relative impact of marketing, research-and-development, and operations capabilities on firm performance. Journal of Marketing, 72(4), 1–11. [https://doi.org/10.1509/jmkg.72.4.1](https://doi.org/10.1509/jmkg.72.4.1)
Krishnan, H. A., Tadepalli, R., & Park, D. (2009). R&D intensity, marketing intensity, and organizational performance. Journal of Managerial Issues, 21(2), 232-244.
Kumar, V., Sriram, S., Luo, A., & Chintagunta, P.K. (2011). Assessing the effect of marketing investments in a business marketing context. Marketing Science, 30(5), 924–940. [https://doi.org/10.1287/mksc.1110.0661](https://doi.org/10.1287/mksc.1110.0661)
Lantz, J.S., & Sahut, J.M. (2005). R&D Investment and the financial performance of technological firms. International Journal of Business, 10(3), 251-270.
Lee, S. (2014). The relationship between growth and profit: Evidence from firm-level panel data. Structural Change and Economic Dynamics, 28(3), 1-11. [https://doi.org/10.1016/j.strueco.2013.08.002](https://doi.org/10.1016/j.strueco.2013.08.002)
Leenders, M.A.A.M., & Wierenga, B. (2008). The effect of the marketing – R&D interface on new product performance : The critical role of resources and scope. International Journal of Research in Marketing 25(1), 56-68. [https://doi.org/10.1016/j.ijresmar.2007.09.006](https://doi.org/10.1016/j.ijresmar.2007.09.006)
Luo, Y., & Child, J. (2015). A composition-based view of firm growth. Management and Organization Review, 11(3), 379-411. [https://doi.org/10.1017/mor.2015.29](https://doi.org/10.1017/mor.2015.29)
Maury, B. (2018). Sustainable competitive advantage and profitability persistence: Sources versus outcomes for assessing advantage. Journal of Business Research, 84(3), 100-113. [https://doi.org/10.1016/j.jbusres.2017.10.051](https://doi.org/10.1016/j.jbusres.2017.10.051)
Memon, M.A., Thurasamy, R., Ting, H., Cheah, J., & Chuah, F. (2024). Control variables: A review and proposed guidelines. Journal of Applied Structural Equation Modelling, 8(2), 1–14. [https://doi.org/10.47263/JASEM.8(2)01](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.47263%2FJASEM.8%282%2901)
Morgan, N.A. (2012). Marketing and business performance. Journal of the Academy of Marketing Science, 40, 102-119. [https://doi.org/10.1007/s11747-011-0279-9](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1007%2Fs11747-011-0279-9)
Mubarok, F., Sultan, Z., Wibowo, M., & Wongsuwatt, S. (2023). Unlocking the Secrets of Profitability: Investigating the Role of Research and Development. Jurnal Manajemen Teori dan Terapan, 16(2), 356-367. [https://doi.org/10.20473/jmtt.v16i2.44958](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.20473%2Fjmtt.v16i2.44958)
Pathak, S., Sen, P.K., Jayaram, J., & Miller, J.M. (2019). “Like poles repel while unlike poles attract”: Contextual performance effects of supply base R&D, focal firm R&D, and commercialization. Decision Sciences, 50(5), 985–1030. [https://doi.org/10.1111/deci.12360](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1111%2Fdeci.12360)
Pauwels, K., & Hanssens, D.M. (2007). Performance regimes and marketing policy shifts. Marketing Science, 26(3), 293-311. [https://doi.org/10.1287/mksc.1060.0267](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1287%2Fmksc.1060.0267)
Porto, R.B., & Foxall, G. (2019). The marketing firm as a metacontingency: Revealing the mutual relationships between marketing and finance. Journal of Organizational Behavior Management, 39(3-4), 115-144. [https://doi.org/10.1080/01608061.2019.1666774](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1080%2F01608061.2019.1666774)
Porto, R.B., & Foxall, G.R. (2020). Marketing firm performance: When does marketing lead to financial gains? Managerial and Decision Economics, 41(2), 191-202. [https://doi.org/10.1002/mde.3046](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1002%2Fmde.3046)
Porto, R.B., & Foxall, G.R. (2022). The marketing‐finance interface and national well‐being: An operant behavioral economics analysis. Managerial and Decision Economics, 43(7), 2941-2954. [https://doi.org/10.1002/mde.3574](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1002%2Fmde.3574)
Porto, R.B., & Oliveira-Castro, J.M. (2015). Consumer purchase and brand performance: The basis of brand market structure. In: Foxall, G. (Ed.), The Routledge companion to consumer behavior analysis (pp. 175-201). Routledge.
Porto, R.B., & da Silva, J.B. (2013). Encadeamento comportamental que incentiva o tempo de contrato com clientes de academia de ginástica. Revista Brasileira de Marketing, 12(4), 64-84. [https://doi.org/10.5585/remark.v12i4.2554](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.5585%2Fremark.v12i4.2554)
Powell, T. C. (2001). Competitive advantage: Logical and philosophical considerations. Strategic Management Journal, 22(9), 875–888. [https://doi.org/10.1002/smj.173](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1002%2Fsmj.173)
Rađenović, T., Krstić, B., Janjić, I., & Vujatović, M.J. (2023). The effects of R&D performance on the profitability of highly innovative companies. Strategic Management, 28(3), 34-45. [https://doi.org/10.5937/StraMan2200034R](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.5937%2FStraMan2200034R)
Rubera, G., & Tellis, G.J. (2014). Spinoffs versus buyouts : Profitability of alternate routes for commercializing innovations. Strategic Management Journal, 35(13), 2043-2052. [https://doi.org/10.1002/smj.2206](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1002%2Fsmj.2206)
Rubera, G., Ordanini, A., & Calantone, R. (2012). Whether to integrate R&D and marketing: The effect of firm competence. Journal of Product Innovation Management, 29(5), 766–783. [https://doi.org/10.1111/j.1540-5885.2012.00936.x](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1111%2Fj.1540-5885.2012.00936.x)
Saranga, H., George, R., Beine, J., & Arnold, U. (2018). Resource configurations, product development capability, and competitive advantage: An empirical analysis of their evolution. Journal of Business Research, 85(4), 32-50. [https://doi.org/10.1016/j.jbusres.2017.11.045](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1016%2Fj.jbusres.2017.11.045)
Sharma, P., Davcik, N.S., & Pillai, K.G. (2016). Product innovation as a mediator in the impact of R&D expense and brand equity on marketing performance. Journal of Business Research, 69(12), 5662-5669. [https://doi.org/10.1016/j.jbusres.2016.03.074](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1016%2Fj.jbusres.2016.03.074)
Sklenarz, F. A., Edeling, A., Himme, A., & Wichmann, J. R. (2024). Does bigger still mean better? How digital transformation affects the market share–profitability relationship. International Journal of Research in Marketing, 41(4), 648-670. [https://doi.org/10.1016/j.ijresmar.2024.01.004](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1016%2Fj.ijresmar.2024.01.004)
Srinivasan, R., Lilien, G.L., & Sridhar, S. (2011). Should firms spend more on research and development and advertising during recessions?. Journal of Marketing, 75(3), 49-65. [https://doi.org/10.1509/jmkg.75.3.49](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1509%2Fjmkg.75.3.49)
Stock, R.M., & Reiferscheid, I. (2014). Who should be in power to encourage product program innovativeness, R&D or marketing? Journal of the Academy of Marketing Science, 42(3), 264–276. [https://doi.org/10.1007/s11747-013-0354-5](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1007%2Fs11747-013-0354-5)
Tavassoli, S., & Karlsson, C. (2015). Persistence of various types of innovation analyzed and explained. Research Policy, 44(10), 1887-1901.
Uysal, M. (2021). Analysis of the relationship between market share and technological development regarding companies: An application on Turkey. In: Dinçer, H. & Yüksel, S. (Eds.), Financial Strategies in Competitive Markets. Contributions to Finance and Accounting (pp. 123–135). Springer. [https://doi.org/10.1007/978-3-030-68612-3_9](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1007%2F978-3-030-68612-3_9)
Vorhies, D.W., Orr, L.M., & Bush, V.D. (2011). Improving customer-focused marketing capabilities and firm financial performance via marketing exploration and exploitation. Journal of the Academy of Marketing Science, 39(5), 736–756. [https://doi.org/10.1007/s11747-010-0228-z](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1007%2Fs11747-010-0228-z)
Wang, X., & Lou, T. (2020). The effect of performance feedback on firms’ unplanned marketing investments. Journal of Business Research, 118(9), 441-451. [https://doi.org/10.1016/j.jbusres.2020.07.015](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1016%2Fj.jbusres.2020.07.015)
Ziegler, A. (2011). Generalized estimating equations. Springer. [https://doi.org/10.1007/978-1-4614-0499-6](https://www.google.com/search?q=https%3A%2F%2Fdoi.org%2F10.1007%2F978-1-4614-0499-6)
Descargas
Publicado
Número
Sección
Licencia
Derechos de autor 2025 Bayram Nofa, Rafael Barreiros Porto
Esta obra está bajo una licencia internacional Creative Commons Atribución 4.0.
Management Department of the School of Economics, Management and Accounting of the University of São Paulo.
The publication of article segments is allowed, subject to prior authorization and source identification.
Copyright is regulated under Licença Creative Commons Attribution
