Original Empirical Research

Journal of the Academy of Marketing Science

, Volume 42, Issue 2, pp 119-136

First online:

Do institutional investors pay attention to customer satisfaction and why?

  • Xueming LuoAffiliated withUniversity of Texas at Arlington Email author 
  • , Ran ZhangAffiliated withGuanghua School of Management, Peking University
  • , Weining ZhangAffiliated withCheung Kong Graduate School of Business
  • , Jaakko AsparaAffiliated withAalto University School of Business

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Extant marketing, accounting, and finance research has neglected to examine the relevance of customer satisfaction information for institutional investors, despite their potential importance. This study develops and supports a framework suggesting that firms with positive changes in customer satisfaction are more attractive to transient institutional investors than to non-transient institutional investors. We also find that the impact of customer satisfaction on transient institutional investor holdings is contingent upon firm intangible asset intensity, product-market demand uncertainty, and financial market volatility. In addition, transient institutional investor holdings at least partially mediate the effects of changes in customer satisfaction on firm abnormal return and idiosyncratic risk. Thus, transient institutional investor investments represent a mechanism through which customer satisfaction affects firm value.


Customer satisfaction Investor community Institutional investor holding Intangibles Marketing-finance interface