Journal of International Marketing

Firms invest in brand capital through advertising. Financial constraints hinder firms’ ability to fund their investment projects. Empirical studies in the finance literature suggest that firms’ access to external financial resources, labeled “financial development,” affects their investment behavior. The authors take the view of advertising spending as investment in brands and study the effect of financial development on advertising spending at the country level using a panel of 59 developing and developed countries during 1990–2016. The results suggest that financial development has a positive and significant effect on advertising spending, and this effect is stronger in countries with a low level of economic development. Furthermore, the authors investigate the role of national culture dimensions including uncertainty avoidance, long-term orientation, collectivism, masculinity, and power distance in the relationship between financial development and advertising. Overall, the results provide evidence that the impact of financial development on advertising spending depends on the national culture dimensions.

Marketing managers generally have to make marketing decisions under financial constraints (i.e., the firm’s inability to generate cash flow for investments and marketing), with limited assurance of the outcomes. Little investigation has been made into the effect of financial constraints on marketing intensity and the subsequent effect on firm value and performance, particularly when it is a volatile environment (e.g., Latin America) that creates the financial constraints. Using a conceptual framework grounded in agency theory, the authors develop a model and test it using a panel data set from the United States and five Latin American countries. The results indicate that financial constraints have a negative effect on marketing intensity and ultimately negatively affect firm value and performance. Furthermore, this study confirms the effect of three moderators—market sensitivity, country governance quality, and country economic development distance—on the relationship between financial constraint and marketing intensity and helps explain differences across the United States and Latin America.

Research has long established the existence of a global brand halo that benefits global brands by triggering “global equals better” inferences by consumers. Nevertheless, little is known about the conditions under which this halo may or may not be used or about whether and, if so, how it can situationally fade. Drawing from regret theory, the authors posit that anticipating regret can conditionally both attenuate and accentuate consumers’ use of the global brand halo and develop a serial conditional process model to explain the mechanism underlying regret’s influence. The results of two experimental studies show that anticipated regret affects global brand halo use—and subsequently relative preference for global or local brands—by increasing consumers’ need to justify their purchase decision. Whether and how consumers will use the global brand halo depends on consumers’ product category schema, while the intensity of the halo’s use depends on consumers’ maximization tendency. The findings offer a decision-theory perspective on the competition between global and local brands and empirically based advice on managerial interventions that can influence global or local brand market shares.

Eco-innovations are increasingly manufactured and consumed across national borders. Although global outsourcing can be financially profitable, it is questionable whether consumers respond to eco-innovations manufactured in different countries in the same way. This article introduces the ecological country-of-manufacture (COM) concept, which reflects consumers’ perception of a country’s commitment to sustainable development policy and practices. Drawing on schema theory, the current research examines how consumer reactions to “ecological (in)congruence”—when the sustainability reputation of a COM is a (mis)match with product eco-friendliness levels—vary across product categories (Study 1a), consumption contexts (Study 1b), and national settings (Study 2). Consumers report more preferential evaluations when there is ecological incongruence for privately consumed products and ecological congruence for publicly consumed products. The results also demonstrate the differential moderating effects of socioeconomic development factors and cultural dimensions. In emerging markets with highly embedded, hierarchical, and high-harmony cultures, consumers require ecological congruence to justify their adoption decisions, whereas in developed markets with highly autonomous, egalitarian, and high-mastery cultures, consumers are more likely to adopt eco-innovations that are ecologically incongruent.