Areas of Expertise

Marketing Strategy, Marketing-Finance, B2B Marketing, Marketing Analytics, Advertising, R&D, Bankruptcy, Trade Credit, Econometrics, Hazard Models, Natural Experiments, Machine Learning

Academic Degrees

• Ph.D., The University of Texas at Austin
• M.B.A., Northwestern University
• M.S. Electrical Engineering, Columbia University
• B.S. Electrical Engineering, University of Illinois at Urbana-Champaign

Professional Experience

• Indiana University
• Freescale Semiconductor
• Motorola
• Digital Equipment Corporation
• Philips Petroleum

Awards, Honors & Certificates

• 3M Faculty Award, 2017-2019
• Sauvain Teaching Award Finalist, Indiana University, 2019
• Trustees Teaching Award Finalist, Indiana University, 2016
• Emerging Scholar Award, American Marketing Association, 2015

Selected Publications

• Astvansh, V., and Jindal, N. (2022). Differential Effects of Received Trade Credit and Provided Trade Credit on Firm Value. Production and Operations Management, 31(2), 781–798. View Full Text

  Abstract

  Abstract

  With over half a trillion dollars in trade credit flowing between firms in the U.S., it is critically important for managers to understand how the trade credit that their firm receives and provides affect its value. Trade credit is a strategic investment in supply chain relationships that allows the recipient to make payment later rather than at the time of the sale. A firm provides trade credit to its downstream business customers and also receives trade credit from its upstream suppliers. Although research has shown that provided trade credit builds a firm’s shareholder value, it has not examined what effect, if any, received trade credit has on the firm’s value. As a result, one might assume that received trade credit affects firm value in the same manner as provided trade credit. We argue otherwise and show that received trade credit and provided trade credit have differential effects on firm value. Received trade credit has a negative direct effect and a positive indirect effect (through profit), whereas provided trade credit has a positive direct effect and a negative indirect effect. The difference in direct effects hinges on the disparate nature of dependence in the supply chain. Provided trade credit increases customers’ dependence on the firm, building the firm’s value. In contrast, received trade credit increases the firm’s dependence on its suppliers, destroying the firm’s value. Empirical results using a sample of 2,804 firms from 1986 to 2017 provide robust support for the hypotheses. They show that managers risk over-estimating the value of a 1 SD increase in received (provided) trade credit by $284.74 ($74.95) million, on average, if they do not consider both the direct and indirect effects it has on their firm’s value.

• Jindal, N. (2020). The Impact of Advertising and R&D on Bankruptcy Survival: A Double-Edged Sword. Journal of Marketing, 84(5), 22-40. View Full Text

  Abstract

  Abstract

  Advertising and research and development (R&D) benefit firms by increasing sales and shareholder value. However, when a firm is in bankruptcy, the cumulative effects of its past advertising and R&D can be a double-edged sword. On the one hand, they increase the firm’s expected future cash flow, which increases the likelihood that the bankruptcy court will decide the firm can survive. On the other hand, they increase the liquidation value of the firm’s assets, which decreases the likelihood that the bankruptcy court will decide that the firm can survive. The author argues that the ability of advertising and R&D to either increase or decrease bankruptcy survival is contingent on the influence that the firm’s suppliers have, relative to other creditors, on the bankruptcy court’s decision. Advertising and R&D increase (decrease) bankruptcy survival when suppliers have a high (low) level of influence. Empirical analyses, conducted on 1,504 bankruptcies, show that advertising (R&D) increases bankruptcy survival when at least 35%−38% (18%−21%) of the bankrupt firm’s debt has been borrowed from suppliers, whereas it decreases bankruptcy survival below this point. Out-of-sample machine learning validation shows that the ability to predict whether a bankrupt customer will survive is substantially improved by considering the firm’s advertising and R&D.

• McAlister, L., Srinivasan, R., Jindal, N., and Cannella, A. A. (2016). Advertising Effectiveness: The Moderating Effect of Firm Strategy. Journal of Marketing Research, 53(2), 207-224. View Full Text

  Abstract

  Abstract

  Advertising's influence on firm sales and firm value has drawn early attention from economists and accountants and more recent attention from marketers. Most studies that have investigated a link between advertising and sales have found such a link. However, studies that have investigated a link between advertising and firm value have only sometimes found that link. Meta-analysis has failed to determine moderators that govern the link between advertising and firm value. In this article, the authors hypothesize that advertising influences firm value for a differentiator because advertising can elaborate the firm's point of difference into brand equity, thereby building firm value. Advertising cannot build brand equity for a cost leader because such a firm has no point of difference on which to build. Identifying differentiators and cost leaders on the basis of firms’ reactions to a change in accounting regulations, the authors confirm hypotheses: advertising is related to sales for all firms, but it is more strongly related to firm value for differentiators than for cost leaders. Beyond explaining differences in advertising effectiveness, this study's indicator of differentiation versus cost leadership should enhance future analyses of marketing's effect on firm-level outcomes using archival financial data.

• Jindal, N., and McAlister, L. (2015). The Impacts of Advertising Assets and R&D Assets on Reducing Bankruptcy Risk. Marketing Science, 34(4), 555-572. View Full Text

  Abstract

  Abstract

  Research has shown that advertising assets and R&D (research and development) assets increase shareholder value. Although one might conclude that their impacts on bankruptcy risk are merely the inverse of their impacts on shareholder value, we argue otherwise and show that the differences hinge on the fact that shareholder value is a function of expected cash flows from all future periods, whereas bankruptcy risk is a function of expected cash flow from only the next period. We show that current market turbulence moderates the impacts of advertising assets and R&D assets on expected cash flow from the next period but not on expected cash flows from more distant future periods. Therefore, market turbulence moderates the impacts of advertising assets and R&D assets on bankruptcy risk but not shareholder value. Market stability increases the impact of advertising assets on reducing bankruptcy risk, whereas market turbulence increases the impact of R&D assets on reducing bankruptcy risk. Using a data set of more than 1,000 firms covering three decades, we find support for our hypotheses. Out-of-sample validation indicates that bankruptcy prediction performance improves when including marketing variables in addition to the usual financial predictors.

Edited on January 9, 2023