Sunk Cost Dilemma Behavior: The Contribution Marketing Expenses towards Financial Performance
Marketing expenses can drove the financial performance of a company, but sometimes it was only a sunk cost. The sunk cost dilemma behavior can confuse a financial manager, confounding decisions about whether to invest in marketing. Thus, this study aimed to explain the relationship between marketing...
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| Format: | Article |
| Language: | English |
| Published: |
Universitas Merdeka Malang
2018-10-01
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| Series: | Jurnal Keuangan dan Perbankan |
| Subjects: | |
| Online Access: | http://jurnal.unmer.ac.id/index.php/jkdp/article/view/1871 |
| _version_ | 1811308174499643392 |
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| author | Gesti Memarista Lila Gestanti |
| author_facet | Gesti Memarista Lila Gestanti |
| author_sort | Gesti Memarista |
| collection | DOAJ |
| description | Marketing expenses can drove the financial performance of a company, but sometimes it was only a sunk cost. The sunk cost dilemma behavior can confuse a financial manager, confounding decisions about whether to invest in marketing. Thus, this study aimed to explain the relationship between marketing expenses and profitability. The research subjects were manufacturing firms listed on the Indonesia Stock Exchange between 2012 and 2016. The results showed that marketing-related research and development expenses, selling expenses, and operating cash flow had a significant positive relationship with return on assets (ROA) and return on equity (ROE). Moreover, lagged research and development expenses—specifically, expenses from the previous four years (RnDt-4)—had a significant effect on ROA and ROE. Leverage had a significant negative effect on ROA and ROE. On the other hand, firm size had no significant impact on profitability. The findings showed that marketing expenses were not a sunk cost; they were an investment that leads to good financial performance. Greater investments in marketing expected to entice consumers bought a company’s products and created more profitability, leading to improved financial performance. |
| first_indexed | 2024-04-13T09:18:32Z |
| format | Article |
| id | doaj.art-1acde9d0c9d34d95a471bdc61089914b |
| institution | Directory Open Access Journal |
| issn | 1410-8089 2443-2687 |
| language | English |
| last_indexed | 2024-04-13T09:18:32Z |
| publishDate | 2018-10-01 |
| publisher | Universitas Merdeka Malang |
| record_format | Article |
| series | Jurnal Keuangan dan Perbankan |
| spelling | doaj.art-1acde9d0c9d34d95a471bdc61089914b2022-12-22T02:52:41ZengUniversitas Merdeka MalangJurnal Keuangan dan Perbankan1410-80892443-26872018-10-0122462564210.26905/jkdp.v22i4.1871Sunk Cost Dilemma Behavior: The Contribution Marketing Expenses towards Financial PerformanceGesti Memarista0Lila Gestanti1Department of Management, Faculty of Economics, Petra Christian University Jl. Siwalankerto 121-131 Surabaya, 60236, IndonesiaDepartment of Management, Faculty of Economics and Business, Universitas Airlangga Jl. Airlangga No.4, Surabaya, 60286, IndonesiaMarketing expenses can drove the financial performance of a company, but sometimes it was only a sunk cost. The sunk cost dilemma behavior can confuse a financial manager, confounding decisions about whether to invest in marketing. Thus, this study aimed to explain the relationship between marketing expenses and profitability. The research subjects were manufacturing firms listed on the Indonesia Stock Exchange between 2012 and 2016. The results showed that marketing-related research and development expenses, selling expenses, and operating cash flow had a significant positive relationship with return on assets (ROA) and return on equity (ROE). Moreover, lagged research and development expenses—specifically, expenses from the previous four years (RnDt-4)—had a significant effect on ROA and ROE. Leverage had a significant negative effect on ROA and ROE. On the other hand, firm size had no significant impact on profitability. The findings showed that marketing expenses were not a sunk cost; they were an investment that leads to good financial performance. Greater investments in marketing expected to entice consumers bought a company’s products and created more profitability, leading to improved financial performance.http://jurnal.unmer.ac.id/index.php/jkdp/article/view/1871Financial PerformanceLagged Research and Development ExpensesMarketing ExpensesSunk Cost Dilemma Behavior |
| spellingShingle | Gesti Memarista Lila Gestanti Sunk Cost Dilemma Behavior: The Contribution Marketing Expenses towards Financial Performance Jurnal Keuangan dan Perbankan Financial Performance Lagged Research and Development Expenses Marketing Expenses Sunk Cost Dilemma Behavior |
| title | Sunk Cost Dilemma Behavior: The Contribution Marketing Expenses towards Financial Performance |
| title_full | Sunk Cost Dilemma Behavior: The Contribution Marketing Expenses towards Financial Performance |
| title_fullStr | Sunk Cost Dilemma Behavior: The Contribution Marketing Expenses towards Financial Performance |
| title_full_unstemmed | Sunk Cost Dilemma Behavior: The Contribution Marketing Expenses towards Financial Performance |
| title_short | Sunk Cost Dilemma Behavior: The Contribution Marketing Expenses towards Financial Performance |
| title_sort | sunk cost dilemma behavior the contribution marketing expenses towards financial performance |
| topic | Financial Performance Lagged Research and Development Expenses Marketing Expenses Sunk Cost Dilemma Behavior |
| url | http://jurnal.unmer.ac.id/index.php/jkdp/article/view/1871 |
| work_keys_str_mv | AT gestimemarista sunkcostdilemmabehaviorthecontributionmarketingexpensestowardsfinancialperformance AT lilagestanti sunkcostdilemmabehaviorthecontributionmarketingexpensestowardsfinancialperformance |