The marketing-finance interface literature has investigated the direct link between innovativeness and stock returns. Moving a step further, we investigate two unanswered questions: How and under what conditions is innovativeness associated with stock returns? Answering these questions is important for managers who have to defend innovation investments to board members and time the introductions of new products. We investigate large individual investors and their national culture in the food and beverage industry. Combining multiple datasets, we first investigate the relationship between innovativeness and large individual investor's stock holding decisions (i.e., to sell, hold onto or buy a firm's stocks). The results indicate that national culture moderates this relationship. At the firm level, we show that large investors' stock holding partially mediates the innovativeness-stock returns relationship and that the culture of a firm's large investors moderates this mediated relationship. Hence, we unveil a special segment of investors, large individual investors, which influence the extent to which firms benefit from innovativeness in the stock market, at least in the food and beverage industry.

1. From:From:
 Large investors (e.g., Oprah Winfrey) decisions can
drive a firm’s performance in the stock market.
 Large investor stockholding decisions, whether to buy or to
sell, influences firm value in the stock market.
 Not all large investors react positively to a firm’s
innovativeness.
 We find that a large investor’s national culture plays a
significant role in determining how she reacts to a firm’s
innovativeness.
The challenge of large investors
Cillo, Griffith, and Rubera (2018)

2. From:From:
Countries where the national culture will
predominately strengthen the innovation to
stock holding relationship.
 Belgium
 France
 Japan
Countries where the national culture will
predominately weaken the innovation to stock
holding relationship.
 Australia
 Ireland
 Italy
Cillo, Griffith, and Rubera (2018)
Countries where the national culture
strengthens and weakens the innovation to
stock holding relationship relatively equally.
 China
 Hungary
 USA

3. From:From:
 Given large investors from different national cultures react
very differently to firm innovativeness, firms can use a
national culture-based segmentation approach when
marketing to large investors.
 This approach means that innovations will be positioned
differently to large investors in different countries.
Firm implications
Cillo, Griffith, and Rubera (2018)

4. From: Cillo, Griffith, and Rubera (2018)
Positioning innovation if cultural dimension is:
Cultural Dimensions Below average Above average
Individualism**: The strength of relations
between members of a society.
Stand out in the market
Uncertainty avoidance: How a society
manages future uncertainty.
Create instability in the market Secure the prosperity of the firm
Power distance: The way a society
addresses differences among its members.
Level the field by reducing the gap
with competitors
Create inequity among firms and
consumers
Masculinity: The distinction between
gender roles in a society.
Contribute to the overall welfare of
society
Strive to be recognized as
worldwide leader and dominant
force in the market
Long-term orientation: The life orientation
of people in a society, reflected in virtues
oriented toward future rewards.
Keep the status quo Be an agent of change in the local
economy
Indulgence: Whether a society values
gratification of human desires related to
enjoying life and having fun.
Comply with a market law that the
firm is forced to abide to in order
to survive
Satisfy personal enjoyment
through an arbitrary choice
Marketing Actions: Positioning Innovativeness along National
Cultural Dimensions*
*Country scores for each cultural dimension can be found at: https://www.hofstede-insights.com/product/compare-countries/
**Individualism is the only dimension of Hofstede’s framework that never weakens the innovativeness–stock holding change
relationship.

5. From:From:
 When positioning firm innovativeness to a large investor from
Brazil a firm might focus on innovativeness as a way for the
firm to:
 stand out in the market;
 secure the prosperity of the firm;
 create inequity among firms and consumers;
 reach worldwide recognition as a leader; and/or
 satisfy personal enjoyment.
 As an example, a firm could state “This product will help our firm be
recognized worldwide as leader in our industry, provide us with a long-
term competitive advantage, and separate our customers from the rest!”
Example
Cillo, Griffith, and Rubera (2018)