WHEN MACROECONOMIC CONDITIONS INFLUENCE MARKETING INVESTMENTS

Garcia, Evelini Lauri Morri; Vieira, Valter Afonso; Rodrigues, Guilherme Henrique Maximo

doi:10.1590/S0034-759020230306x

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Revista de Administração de Empresas

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ARTICLES • Rev. adm. empres. 63 (3) • 2023 • https://doi.org/10.1590/S0034-759020230306x copy

WHEN MACROECONOMIC CONDITIONS INFLUENCE MARKETING INVESTMENTS

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

Although macroeconomic conditions are recognized as factors that influences country’s performance, little is known about how companies from different sectors absorb such impacts. Using the myopic marketing theory, the paper goal is to analyze the relationship between macroeconomic conditions and marketing investments in Brazilian companies. The sample consists of 183 Brazilian companies with quarterly financial data, obtained from Economatica, and macroeconomic data, obtained from IpeaData (2010 to 2020). First, the results indicate that GDP, interest rates and consumer confidence are positively related, and the exchange rate and unemployment showed a negative relationship with marketing investments. Second, the impact of these relationships differs across sectors. Third, the results demonstrate that the level of investments and expansion of marketing investments depend on macroeconomic conditions, indicating which contexts influence the discretionary treatment of the marketing budget.

Keywords:
investments; marketing; macroeconomics conditions; sectors; myopia

Variable	Measurement	Data	References
Marketing Intensity	Proxy of quarterly selling, general and administrative expenses weighted by total assets at the end of quarter t	Relevant fact	*Garcia et al. (2022)Garcia, E. L. M., Vieira, V. A., & Borges, C. P. (2022). Informações dos investimentos de marketing: Recurso de diferenciação ou segredo?. Revista de Administração Contemporânea, 26(2), 1-20. https://doi.org/10.1590/1982-7849rac2022200386.por https://doi.org/10.1590/1982-7849rac2022... , Palomino–Tamayo et al. ( 2020)Palomino-Tamayo, W., Timana, J., & Cerviño, J. (2020). The firm value and marketing intensity decision in conditions of financial constraint: A comparative study of the United States and Latin America. Journal of International Marketing, 28(3), 21-39. https://doi.org/10.1177/1069031X2094353 https://doi.org/10.1177/1069031X2094353... , Markovitch et al.* ( 2020)**Markovitch, D. G., Huang, D., & Ye, P. (2020). Marketing intensity and firm performance: Contrasting the insights based on actual marketing expenditure and its SG&A proxy. Journal of Business Research, 118(1), 223-239. https://doi.org/10.1016/j.jbusres.2020.06.032 https://doi.org/10.1016/j.jbusres.2020.0...
Marketing Intensity (Variation)	Quarterly variation of the proxy for quarterly selling, general and administrative expenses weighted by total assets at the end of quarter t	Relevant fact
GDP	GDP R$ (Millions) of quarter t	Economatica	Barbosa & Nogueira (2018)Barbosa, I. B., & Nogueira, D. R. (2018). Impacto dos indicadores macroeconômicos nos índices de rentabilidade das empresas brasileiras: Uma análise no setor alimentício de 2010 a 2016. Revista de Administração, Contabilidade e Economia da FUNDACE, 9(1), 31-46. http://dx.doi.org/10.13059/racef.v9i1.502 http://dx.doi.org/10.13059/racef.v9i1.50...
Fees	Selic rate fixed by the Copom BACEN (% pa) for quarter t	Economatica	*Pontel et al.* (2020)**Pontel, J., Tristão, P. A., & Boligon, J. A. R. (2020). O comportamento da taxa Selic e as operações de investimento e financiamento de pessoa física no período pós-crise econômica. Revista Gestão Organizacional, 13(2), 123-141. https://doi.org/10.22277/rgo.v13i2 https://doi.org/10.22277/rgo.v13i2...
Exchange	Variation of the R$ / US$ exchange rate in quarter t compared to the same quarter of the previous year	Economatica	*Fonseca et al . al.* (2018)**Fonseca, S. E., Santos, A. O., Pereira, M. V. L., & Camargos, M. A. (2018). Análise do impacto de variáveis macroeconômicas no desempenho financeiro e endividamento de empresas listadas na B3. Revista Universo Contábil, 14(4), 93-114. http://dx.doi.org/10.4270/ruc.2018429 http://dx.doi.org/10.4270/ruc.2018429...
Inflation	IGPM variation (% per month) in quarter t compared to the same quarter of the previous year	Economatica	*Zschornack et al.* (2020)**Zschornack, T., Oliveira, R. A. M., & Souza, J. A. (2020). Análise dos índices econômicos de inflação para uso como indexadores em contratos de consumo. Iberoamerican Journal of Industrial Engineering, 12(24), 53-70. https://incubadora.periodicos.ufsc.br/index.php/IJIE/article/view/v12n2401 https://incubadora.periodicos.ufsc.br/in...
Unemployment	Quarterly change in the unemployment rate (% am) in quarter t	Economatica	Barbosa & Nogueira (2018)Barbosa, I. B., & Nogueira, D. R. (2018). Impacto dos indicadores macroeconômicos nos índices de rentabilidade das empresas brasileiras: Uma análise no setor alimentício de 2010 a 2016. Revista de Administração, Contabilidade e Economia da FUNDACE, 9(1), 31-46. http://dx.doi.org/10.13059/racef.v9i1.502 http://dx.doi.org/10.13059/racef.v9i1.50...
Consumer Confidence	t consumer confidence index	Economatica	Oliveira & Carneiro (2015)Oliveira, F. N., & Carneiro, C. (2015). Índices de confiança, suas influências e impactos. Econômica, 17(2), 123-156. https://doi.org/10.22409/reuff.v17i2.34995 https://doi.org/10.22409/reuff.v17i2.349...
Return on Assets (ROA)	Net income for the quarter divided by total assets at the end of the quarter t	Economatica	*Markovitch et al. (2020)Markovitch, D. G., Huang, D., & Ye, P. (2020). Marketing intensity and firm performance: Contrasting the insights based on actual marketing expenditure and its SG&A proxy. Journal of Business Research, 118(1), 223-239. https://doi.org/10.1016/j.jbusres.2020.06.032 https://doi.org/10.1016/j.jbusres.2020.0... , Francischetti et al.* (2013)**Francischetti, C. E., Galeano, R., & Bertassi, A. L. (2013). Modelos financeiros para decisão de investimentos na gestão estratégica de marketing. Caderno Profissional de Marketing – UNIMEP, 1(2), 23-36. https://doaj.org/article/7bd4ed2d0173430d97d9dcebef03b6d2 https://doaj.org/article/7bd4ed2d0173430...
Asset Turnover	Ratio between net revenue for the quarter and total assets at the end of quarter t	Economatica	Barbosa & Nogueira (2018)Barbosa, I. B., & Nogueira, D. R. (2018). Impacto dos indicadores macroeconômicos nos índices de rentabilidade das empresas brasileiras: Uma análise no setor alimentício de 2010 a 2016. Revista de Administração, Contabilidade e Economia da FUNDACE, 9(1), 31-46. http://dx.doi.org/10.13059/racef.v9i1.502 http://dx.doi.org/10.13059/racef.v9i1.50...
Growth	Percentage change in revenues for quarter t compared to the same quarter of the previous year	Economatica	*Palomino–Tamayo et al. (2020)Palomino-Tamayo, W., Timana, J., & Cerviño, J. (2020). The firm value and marketing intensity decision in conditions of financial constraint: A comparative study of the United States and Latin America. Journal of International Marketing, 28(3), 21-39. https://doi.org/10.1177/1069031X2094353 https://doi.org/10.1177/1069031X2094353... , Markovitch et al.* (2020)**Markovitch, D. G., Huang, D., & Ye, P. (2020). Marketing intensity and firm performance: Contrasting the insights based on actual marketing expenditure and its SG&A proxy. Journal of Business Research, 118(1), 223-239. https://doi.org/10.1016/j.jbusres.2020.06.032 https://doi.org/10.1016/j.jbusres.2020.0...
Cash Holding	Cash and cash equivalents weighted by total assets at the end of quarter t	Economatica	Martínez-Sola, García-Teruel, & Martínez-Solano (2013)Martínez-Sola, C., García-Teruel, P. J., & Martínez-Solano, P. (2013). Corporate cash holding and firm value. Applied Economics, 45(2), 161-170. https://doi.org/10.1080/00036846.2011.595696 https://doi.org/10.1080/00036846.2011.59...
indebtedness	Total liabilities weighted by total assets at the end of quarter t	Economatica	*Fonseca et al. (2018)Fonseca, S. E., Santos, A. O., Pereira, M. V. L., & Camargos, M. A. (2018). Análise do impacto de variáveis macroeconômicas no desempenho financeiro e endividamento de empresas listadas na B3. Revista Universo Contábil, 14(4), 93-114. http://dx.doi.org/10.4270/ruc.2018429 http://dx.doi.org/10.4270/ruc.2018429... , Francischetti et al.* (2013)**Francischetti, C. E., Galeano, R., & Bertassi, A. L. (2013). Modelos financeiros para decisão de investimentos na gestão estratégica de marketing. Caderno Profissional de Marketing – UNIMEP, 1(2), 23-36. https://doaj.org/article/7bd4ed2d0173430d97d9dcebef03b6d2 https://doaj.org/article/7bd4ed2d0173430...
Market-to-Book	Market value divided by shareholders’ equity at the end of quarter t	Economatica	*Bae et al.* (2017)**Bae, J., Kim, S. J., & Oh, H. (2017, April). Taming polysemous signals: The role of marketing intensity on the relationship between financial leverage and firm performance. Review of Financial Economics, 33, 29-40. https://doi.org/10.1016/j.rfe.2016.12.002 https://doi.org/10.1016/j.rfe.2016.12.00...
Size	Natural logarithm of total assets at the end of quarter t	Economatica	*Bae et al. (2017)Bae, J., Kim, S. J., & Oh, H. (2017, April). Taming polysemous signals: The role of marketing intensity on the relationship between financial leverage and firm performance. Review of Financial Economics, 33, 29-40. https://doi.org/10.1016/j.rfe.2016.12.002 https://doi.org/10.1016/j.rfe.2016.12.00... , Palomino-Tamayo et al. (2020)*Palomino-Tamayo, W., Timana, J., & Cerviño, J. (2020). The firm value and marketing intensity decision in conditions of financial constraint: A comparative study of the United States and Latin America. Journal of International Marketing, 28(3), 21-39. https://doi.org/10.1177/1069031X2094353 https://doi.org/10.1177/1069031X2094353...

DV: Intensity of marketing investments	All Sectors (full sample)		industrial goods		Cyclical Consumption		Non-cyclical Consumption		Basic Materials		Petr., Gas and Biocomb.		Health
Predictive variables	Coef.	t-value	Coef.	t-value	Coef.	t-value	Coef.	t-value	Coef.	t-value	Coef.	t-value	Coef.	t-value
GDP	0.00*	2.25	0.00*	2.06	0.00	1.35	0.00	-1.23	0.00D	1.96	-0.00	-1.42	0.00D	2.08
Fees	0.04***	3.54	0.05*	2.05	0.03	1.51	0.02	1.38	0.01	0.33	-0.03	-0.50	0.06*	2.24
Exchange	-0.00	-0.20	0.00▢	1.76	-0.00	-0.08	0.00	0.27	-0.00	-0.55	-0.01	-1.36	-0.00	-0.75
Inflation	0.00	0.80	0.00	0.08	0.00	0.73	-0.00	-0.82	0.00	1.39	0.00	0.99	-0.00	-0.48
Unemployment	-0.00	-0.78	0.00	0.76	-0.01▢	-1.70	-0.00	-0.35	0.00	0.15	0.02▢	1.89	-0.01*	-2.32
Consumer Confidence	0.00*	2.17	0.00	1.42	0.00	0.35	0.00	0.52	0.00	1.70	0.00	1.36	-0.00	-0.31

Covariates
ROA	-0.10***	-4.36	-0.11	-1.64	-0.14***	-4.58	-0.04*	-2.65	0.03	-1.22	-0.07	-1.50	-0.27***	-4.01
Asset Turnover	0.11***	7.93	0.07***	3.56	0.15***	7.74	0.14***	5.57	0.04*	2.81	0.16***	6.00	0.16***	4.65
Growth	-0.00▢	-1.74	-0.00	-0.59	-0.00	-1.53	-0.00*	-2.66	0.00	0.25	-0.00	-0.69	0.01	0.69
Cash Holding	-0.01	-1.53	-0.01	-1.04	-0.02	-1.21	0.00	0.19	-0.01	-1.10	-0.01	-0.42	-0.01	-0.67
Indebtedness	0.00	0.81	0.00	0.83	-0.00	-1.07	0.01*	2.76	-0.01*	-2.43	0.00	0.79	-0.01	-0.94
Market-to-Book	-0.00	-0.90	0.00	0.60	-0.00	-1.59	-0.00	-0.81	0.00	0.76	0.00	0.39	0.00	0.95
Size	-0.01***	-4.93	-0.01**	-3.26	-0.00▢	-1.90	-0.01	-1.47	-0.00	-1.58	-0.01*	-2.29	-0.01	-1.06
Constant	0.11***	4.86	0.14**	2.85	0.06*	2.28	0.12▢	1.95	0.06	1.69	0.17▢	2.05	0.11	1.02
N (remarks)	5,032		1,143		1,866		563		658		279		335
Test F	16.67***		5.09***		18.57***		42.86***		7.91***		0.00		3785.93***
R²
Within	0.30		0.20		0.35		0.50		0.19		0.57		0.60
Between	0.29		0.52		0.46		0.26		0.40		0.57		0.72
Overall	0.29		0.40		0.44		0.27		0.39		0.52		0.66
Fixed Effects	Yes		Yes		Yes		Yes		Yes		Yes		Yes
Standard error clustered by company	Yes		Yes		Yes		Yes		Yes		Yes		Yes

DV: Variation in the intensity of marketing investments	All sectors (full sample)		industrial goods		Cyclical Consumption		Non-cyclical Consumption		Basic Materials		Petr., Gas and Biocomb.		Health
Predictive variables	Coef.	t-value	Co ef.	t-value	Co ef.	t-value	Coef.	t-value	Coef.	t-value	Coe f.	t-value	Coef.	t-value
GDP	0.00*	2.38	0.00	1.23	0.00	1.52	0.00	1.63	0.00	1.44	0.00	-0.63	0.00	0.38
Fees	0.24	0.99	0.92*	2.08	0.01	0.02	0.20	0.29	0.68	1.02	-1.25	-1.08	0.02	0.03
Exchange	-0.08**	-3.17	-0.06	-0.92	-0.04	-0.90	-0.14*	-2.12	-0.13*	-2.28	-0.09	-0.72	-0.08	-0.86
Inflation	0.00	0.05	0.00	0.36	0.00	0.52	0.00	0.67	-0.00	-0.10	-0.00	-0.04	-0.00	-1.00
Unemployment	0.01	0.29	-0.14	-1.57	0.04	0.44	-0.08	-0.64	-0.01	-0.11	0.37	1.77	0.11	0.92
Consumer Confidence	0.00	0.68	-0.00	-0.15	0.00▢	1.81	-0.00	-0.43	-0.00	-0.69	0.00	0.53	0.00	0.45

Covariates
ROA	-1.51***	-6.61	-1.28***	-3.70	-2.39***	-5.91	-0.54	-1.08	-0.30	-0.69	-0.64	-1.55	-5.32***	-4.10
Asset Turnover	0.93***	6.51	0.84**	3.12	0.98***	4.14	0.98***	5.46	0.54**	2.97	1.97***	6.87	0.91***	4.53
Growth	0.08***	3.60	0.09▢	1.94	0.05	1.65	0.18**	3.05	0.14**	3.01	-0.05	-0.59	0.28**	3.39
Cash Holding	-0.06	-0.47	0.03	0.14	-0.16	-0.52	-0.15	-0.81	0.36	1.01	-0.53	-1.19	-0.22	-1.14
Indebtedness	-0.03	-0.80	0.06	0.97	-0.13*	-2.45	-0.10	-1.11	-0.17*	-2.34	-0.03	-0.36	-0.55*	-2.65
Market-to-Book	-0.01▢	-1.75	-0.01	-1.21	-0.00	-0.52	-0.01▢	-1.83	0.01	0.93	-0.01	-1.10	0.01	1.17
Size	-0.11***	-6.05	-0.07	-1.44	-0.12***	-4.14	-0.14	-1.40	-0.11*	-2.43	-0.13**	-3.55	-0.11	-1.17
Constant	1.33***	4.57	0.57	0.79	1.41**	3.03	1.74	1.12	1.49*	2.18	1.85*	2.85	1.51	1.33
No	5,032		1,143		1,866		563		658		279		335
Test F	18.96***		6.27***		14.79***		9.24***		5.91***		0.00		114.41***
R²
Within	0.11		0.09		0.14		0.19		0.11		0.16		0.31
Between	0.00		0.00		0.02		0.01		0.16		0.09		0.13
Overall	0.01		0.03		0.02		0.01		0.03		0.01		0.03
Fixed Effects	Yes		Yes		Yes		Yes		Yes		Yes		Yes
Standard error clustered by company	Yes		Yes		Yes		Yes		Yes		Yes		Yes

Variables	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)	(13)	(14)	(15)
(1) Intens. Inv. Marketing	1.00
(2) Var. Intens. Inv. Mkt	0.12***	1.00
(3) GDP	-0.02▢	-0.01	1.00
(4) Interest	0.04***	0.05***	-0.47***	1.00
(5) Exchange	-0.03**	-0.05***	0.34***	-0.18***	1.00
(6) Inflation	0.03*	0.03**	-0.20***	0.30***	0.20***	1.00
(7) Unemployment	-0.01	-0.01	0.06***	0.47***	0.15***	-0.20***	1.00
(8) Consumer Confidence	0.01	0.00	-0.75***	-0.08***	-0.39***	0.08***	-0.65***	1.00
(9) ROA	0.02*	-0.07***	-0.08***	-0.02	-0.06***	-0.01	-0.05***	0.11***	1.00
(10) Asset Turnover	0.61***	0.05***	-0.07***	0.03**	-0.05***	0.02	-0.03**	0.07***	0.22***	1.00
(11) Sales Growth	0.01	0.09***	-0.11***	-0.07***	-0.06***	-0.03**	-0.12***	0.17***	0.23***	0.15***	1.00
(12) Cash Holding	-0.09***	-0.03*	-0.03**	-0.00	0.03**	-0.05***	0.04**	0.03*	0.20***	0.05***	0.03*	1.00
(13) Debt	0.06***	0.02▢	0.12***	-0.07***	0.04***	-0.03**	0.00	-0.09***	-0.49***	-0.02*	-0.07***	-0.26***	1.00
(14) Market-to-Book	0.23***	-0.04**	-0.01	-0.08***	-0.03**	-0.02▢	-0.05***	0.07***	0.28***	0.22***	0.12***	0.16***	-0.21***	1.00
(15) Size	-0.30***	-0.03**	0.06***	-0.04***	0.04**	-0.02▢	0.00	-0.04***	0.14***	-0.17***	0.06***	0.16***	-0.23***	0.14***	1.00
No	7,829	7,538	8,976	8,976	8,976	8,976	6,324	8,976	7,829	7,829	7,529	7,464	7,916	6,990	7,916
Average	0.04	-0.01	493,220.50	0.09	0.11	-9.13	0.09	125.53	0.00	0.19	0.09	0.08	0.71	1.81	14.52
Standard deviation	0.03	0.25	96,616.70	0.03	0.18	65.69	0.16	25.43	0.03	0.13	0.32	0.07	0.49	2.23	1.91
Minimum	0.00	-0.56	311,651.60	0.02	-0.23	-435.00	-0.11	85.53	-0.11	0.02	-0.64	0.00	0.16	-1.39	6.75
Maximum	0.14	0.77	685,479.80	0.14	0.62	63.00	0.39	164.42	0.06	0.57	1.10	0.29	2.66	9.48	20.74

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