The effect of channel awards on company value

Using signaling theory, this event study aims at determining the effect of announcements about marketing channel awards on recipient company value. The dataset consists of press releases announcing awards to U.S. public companies (1993-2012), matched with financial data. The analysis focuses on award recipients (n=178 events). Results indicate that there are no positive abnormal returns associated with channel award announcements; and there is also no difference when taking the source (individual company or external stakeholder) of the award into account. Returns are positive, however, when awards are presented at dedicated events and to firms operating in concentrated industries. In effect, investors appear to value awards primarily for their visibility in recognizing channel players and for their differentiation potential in concentrated markets.