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Do Service Guarantees Guarantee Greater Market Value
| Content Provider | Semantic Scholar |
|---|---|
| Author | Meyer, Jeffrey Gremler, Dwayne D. Hogreve, Jens |
| Copyright Year | 2014 |
| Abstract | Service guarantees are an important feature of many service offerings because consumers recognize greater risk associated with the purchase of services than with the purchase of goods. Despite substantial service guarantee research in the past two decades though, no extant study has examined the return on service guarantee investments. To fill this gap, the authors examine the effect of a service guarantee on a firm’s market value by identifying new service guarantee announcements, then using these announcements as events in an event study. The results show that simply offering a service guarantee does not result in greater market value, as measured by a change in stock market returns, for the offering firm. Instead, the market value of a service guarantee depends on its scope and the process required to invoke the guarantee. In particular, service guarantees that are specific in scope or automatically invoked lead to significantly greater market value than unconditional or customer-invoked guarantees, re... |
| Starting Page | 150 |
| Ending Page | 163 |
| Page Count | 14 |
| File Format | PDF HTM / HTML |
| DOI | 10.1177/1094670513505359 |
| Volume Number | 17 |
| Alternate Webpage(s) | http://www.gremler.net/personal/research/2014_Guarantees_and_Firm_Value_JSR.pdf |
| Alternate Webpage(s) | https://doi.org/10.1177/1094670513505359 |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
