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Investor sentiment, customer satisfaction and stock returns

Chi-Lu Peng (Department of Finance, Chung Hua University, Hsin Chu, Taiwan)
Kuan-Ling Lai (Department of Finance, National Sun Yat-sen University, Kaohsiung,Taiwan)
Maio-Ling Chen (Department of Finance, National Sun Yat-sen University, Kaohsiung,Taiwan)
An-Pin Wei (International Business School, Sun Yat-sen University, Zhuhai, China)

European Journal of Marketing

ISSN: 0309-0566

Article publication date: 11 May 2015




This study aims to investigate whether and how different sentiments affect the stock market’s reaction to the American Customer Satisfaction Index (ACSI) information.


The portfolio approach, with time-varying risk factor loadings and the asset-pricing models, is borrowed from the finance literature to investigate the ACSI-performance relationship. A direct sentiment index is used to examine how investors’ optimistic, neutral and pessimistic sentiments affect the aforementioned relation.


This paper finds that customer satisfaction is a valuable intangible asset that generates positive abnormal returns. On average, investing in the Strong-ACSI Portfolio is superior to investing in the market index. Even when the stock market holds pessimistic beliefs, investors can beat the market by investing in firms that score well on customer satisfaction. The out-performance of our zero-cost, long–short ACSI strategy also confirms the mispricing of ACSI information in pessimistic periods.

Research limitations/implications

Findings are limited to firms covered by the ACSI data.

Practical implications

Finance research has further documented evidence of the stock market under-reacting to intangible information. For example, firms with higher research and development expenditures, advertising, patent citations and employee satisfaction all earn superior returns. Literature also proves that investors efficiently react to tangible information, whereas they undervalue intangible information. In summary, combining our results and those reported in the literature, customer satisfaction is value-relevant for both investors and firm management, particularly in pessimistic periods.


This study is the first to investigate how sentiment affects the positive ACSI-performance relationship, while considering the time-varying property of risk factors. This study is also the first to show that ACSI plays a more important role during pessimistic periods. This study contributes to the growing literature on the marketing–finance interface by providing better understanding of how investor emotional states affect their perceptions and valuations of customer satisfaction.



Peng, C.-L., Lai, K.-L., Chen, M.-L. and Wei, A.-P. (2015), "Investor sentiment, customer satisfaction and stock returns", European Journal of Marketing, Vol. 49 No. 5/6, pp. 827-850.



Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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