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The purpose of this paper is to analyze to what extent and in what ways signaling theory has been explored within the field of international marketing. This paper systematically reviews the use of signaling theory in the field of international marketing. Communication is a core aspect of the international marketing process. Research in this field has explored effective and unique ways of improving the communication flow to reduce the asymmetry of information between international consumers and the firm. This notion is adopted, enhanced and strengthened by signaling theory. Signaling theory has recently received the attention of international marketing scholars.

The systematic review methodology was applied for the purpose of identifying the relevant studies. We extracted academic articles over the last 23 years from the domain of international marketing that directly contribute to signaling theory based on 57 journal articles extracted through the systematic review process.

Based on systematic research the results reveal that the topic has grown and continues to expand within the broader international marketing field. We offer a theoretical conceptual framework to better understand signaling theory in the context of international marketing.

The authors map and critically evaluate the use of signaling theory in international marketing. Relevance of signaling theory in international marketing is growing and authors present an integrative framework that organizes the existing literature, and provides scholars to further expand on emerging themes of the domain. The paper offers some useful future research directions.

Signals, e.g. information released by firms about new products attract the attention and scrutiny of customers, competitors and other stakeholders. In product management, an important area of research focuses on the economic value of such signals. However, extant studies consider valuation effects of product signals independently, and largely ignore how the value of a product signal at launch depends upon prior preannouncements. This study aims to investigate how the dependence of new product development (NPD) signals on past preannouncements affects firms’ security prices.

The study develops a conceptual model that draws upon information asymmetry theories, i.e. signaling and agency theory to hypothesize the effect of firms’ product introduction announcements on security prices given two antecedent preannouncement types (costless and costly signals). Hypotheses are tested by conducting an event study analysis on a sample of 149 matched observations (product introduction announcement preceded by a certain type of preannouncement).

Empirical results confirm the hypothesis that positive valuation effects are observed during product launch that is preceded by initial costless product signaling. In contrast, for ex ante costly product signaling, launch events are not diagnostic enough to affect value. Since organizations’ NPD communications can revise investors’ prior beliefs, they need to be understood in more detail and managed strategically.

Valuation metrics can be noisy with a potential to influence information events. In addition, product introduction signals may be deployed more frequently in certain fast-paced industries, e.g. hi-tech.

Managers can incorporate signal dependence in product communications. For example, in costless ex ante product signaling situations, initial economic loss may be recovered through launch announcements. Furthermore, when costly signals have been used earlier, firms may economize on promotion costs during launch.

Past research has focused on assessing the economic value of new product signals independently, i.e. as discrete events. Absent is an examination of valuation effects due to the dependence of launch signals on prior preannouncements. This paper addresses the dependence gap, and empirical results show that even if firms do not deploy product signals ex ante, value can be created through ex post launch announcements.

Leveraging signalling theory and institutional environment theory, this study aims to examine how the entrepreneurial orientation of emerging market firms impacts initial public offering (IPO) performance.

The authors conduct regression analysis based on archival data from 312 firms’ IPOs in India.

The results in the Indian context suggest it differs from IPO performance in developed markets. In an emerging market context, the findings suggest that only competitive aggressiveness is valued by investors in IPOs. The findings further show that proactiveness and autonomy negatively influence IPO underpricing.

The research propositions imply that, owing to institutional voids in emerging markets, investors’ risk propensity and, hence, rewarding a firm’s entrepreneurial orientation differ from those in developed markets.

Extant literature has given limited attention to the dynamics of entrepreneurial orientation and the effect of each dimension of entrepreneurial orientation on IPO performance in emerging markets.

Platform certification constitutes an effective mechanism for managing the lemon problem concerning food e-commerce. This work aims to evaluate the market effect of platform certification and analyzes its correction mechanism for lemon problem combined with reputation mechanism.

Utilizing the Gold Seller certification of Taobao.com to serve as an illustration, the authors conducted an empirical study based on the sales data of hairy crabs among 2,239 sample sites over six points in time from October to December 2019, systematically examining the market effect of food e-commerce platform certification along with the interaction between food e-commerce platform certification and reputation mechanisms, followed by a heterogeneity test by product price.

This study finds that sellers with platform certification can significantly increase their sales. The market effect of platform certification is more easily observed in the low-price product market. In addition, platform certification and reputation mechanisms have complementary effects. In a low-price product market, the complementary effect of platform certification and product reputation diminishes, while the complementary effect of platform certification and seller reputation disappears.

This study explores the market effect of food e-commerce platform certification, reveals the market effect of certification mechanism when multiple signaling mechanisms exist simultaneously and conducts an empirical test based on real market data. It provides a better comprehension of how platform certifications work in food e-commerce.

Although the impact of environmental, social and governance (ESG) on firms' innovation has attracted attention, the existing research findings diverge. The authors believe that failure to consider both innovation input and output is an important reason for the divergence of conclusions in the extant literature when discussing the impact of ESG and firm innovation. Thus, based on signaling theory, this study aims to reconcile these divergent findings by examining the impact of ESG performance on firms' innovation efficiency.

To seek empirical evidence to support the authors’ theoretical view, the authors conduct an empirical test based on the Tobit model using 8 years of data from Chinese listed companies.

Although ESG performance effectively improves firms' innovation efficiency, the institutional-level signaling environment (including state-owned firms and regional market development) weakens the positive effect of ESG performance on firms' innovation efficiency. Further tests suggest that financing constraints partially mediate the relationship between ESG performance and firms' innovation efficiency.

By systematically revealing whether, how and under what circumstances ESG performance improves firms' innovation advantages, this study bridges the gap in the existing literature and highlights important implications to suggest how firms can better capture the value associated with ESG.

Ethereum-based blockchain technology (EBT) affords members of the Enterprise Ethereum Alliance (EEA) a market advantage in deploying blockchain within their organizations, including cybersecurity and operational benefits, that leads firms to strategically invest in this nascent technology. However, the impact of such strategic investments in EBT has yet to be explored in the context of its relationship to firm value. Therefore, this study explores EBT-specific firm-level characteristics that result in a stock market reaction to announcements of strategic investments.

The authors use the event study methodology, strategic investment literature and signaling theory as contextualizing frameworks for their study. Additionally, the authors explore a new method for examining technology investments as a strategic counter to cybersecurity threats.

Firms that signal to the market their strong commitment to their strategic investment by developing an EBT proof of concept see significantly higher market returns. Firms that have had prior cybersecurity incidents are rewarded by the market for strategically investing in EBT, and when firms with large undistributed free cash flows utilize this cash for strategic EBT investment, the market is more likely to reward these firms, indicating the market views EBT investment positively in these circumstances.

The results of this study provide new evidence of the value impact of EBT for firms that suffered cybersecurity events in the past. The authors provide empirical evidence of firm-level characteristics that investors use to discern whether a strategic investment in EBT will drive organizational value. Likewise, the authors demonstrate how signaling affects investor perceptions of strategic information technology (IT) investments in EBT.

Service providers on highly competitive online outsourcing platforms employ various signals to entice buyers to make online purchases. One such signal—the solution exemplars—attracts attention through depictions of exemplary prior work completed by the service providers. Unfortunately, it is not known the extent to which solution exemplar characteristics affect sales performance nor is it clear how such signals perform in the presence of complementary signals such as service provider expertise. This paper explores these issues.

Extending signaling theory, the authors develop a model to explore the effects of solution exemplar characteristics (i.e. exemplar quantity, exemplar diversity and exemplar popularity) on sales performance under the moderating impact of service provider expertise. The authors test the model using proprietary data from ZBJ.com, a leading online outsourcing platform in China.

Exemplar quantity and exemplar popularity positively affect sales performance; exemplar diversity has no significant impact on sales performance and service provider expertise positively moderates the relationships between exemplar quantity, exemplar popularity and sales performance.

This work makes several significant contributions. First, the authors enrich the research on signals in online outsourcing by exploring the impact of solution exemplar characteristics on sales performance. Second, the authors analyze three solution exemplar characteristics: exemplar quantity, exemplar diversity and exemplar popularity. Third, this work shows that service provider expertise moderates the relationship between solution exemplar characteristics and sales performance. Important practical implications for both online outsourcing platforms and service providers are discussed.

This study explores how app store awards shape the behavior of leading digital entrepreneurs, focusing on their engagement in technological innovation through feedback and re-signaling mechanisms. It aims to reveal the nudging effect of award signals on entrepreneurial behavior.

In this study, data from 349 leading mobile app entrepreneurs in the UK Google Play Store were collected over an extended period from various sources. Functionality novelty and explorative behavior were assessed by analyzing app release date and permission technologies in comparison to both their own prior apps and those of their closest competitors. Hypothesized relationships were tested using accelerated failure time parametric models.

This study extends the literature on signaling by showing that (1) the top developer award signal served to nudge entrepreneurs to improve the functionality novelty of their apps and those who succeeded were less likely to switch to another product category, (2) the award signal created a window of opportunity for non-award entrepreneurs to respond and those who released new apps around the midpoint of a normal app development cycle significantly improved the likelihood of winning the award in a subsequent round of award-giving, and (3) the effect of functionality novelty on winning the award was more pronounced when non-award entrepreneurs pursued more explorative than exploitative behavior in app development.

The results offer novel insights into an understudied area, specifically the influence of online award signals on nudging entrepreneurs to pursue technological innovation. The research also highlights the crucial role played by the app store as an intermediary signaler.

This study elucidates the interactive relationship of sustainability assurance (SA) quality with corporate environmental sustainability performance (CESP) and firm value and explores the moderating impact of CESP on the SA quality–firm value relationship.

The sample comprises 320 firm-year observations of 40 companies listed on the Cotation Assistée en Continu (CAC 40) from 2010 to 2019. The authors use the simultaneous equations model to capture the CESP and SA quality–firm value relationship and apply the three-stage regression and generalised method of moments approaches to address possible endogeneity.

The results show that CESP, as assessed by International Organisation for Standardisation (ISO) 14001 certification, has a significant positive effect on firm value, the relevance of which implies that in the case of good environmental performance, society's perception of a firm is much more favourable; consequently, the firm is likely to be rewarded with a premium value in capital markets. In addition, environmental performance has a stronger interaction with SA quality, acting as a moderator variable; thus, greater SA quality signals credibility owing to increased eco-efficiency. The authors interpret their findings within a multi-theoretical framework that draws insights from legitimacy, stakeholders and signalling theoretical perspectives.

This study contributes to the literature by re-examining the relationship between SA quality and firm value. It also provides new evidence of the moderating effect of CESP on the SA quality–firm value nexus. Specifically, this study explores the joint effects of credibility and eco-efficiency on market confidence in sustainability information. The authors use a simultaneous equation model to capture the reciprocal association between SA quality and firm value, whereas prior studies on SA quality and market performance have frequently used single-equation regression. The authors also find that CESP positively moderates the relationship between SA quality and firm value. Including CESP and exploring the moderating impact of eco-efficiency on the SA quality–firm value relationship is a novel approach.

This paper aims to investigate the long-run financial and environmental performance of corporate green bond issuers, worldwide.

The data includes 259 corporate green bond issuers from 2013 to 2020. The authors adopt the matching approach, using the nearest neighbor method to select the control firms. The event-time approach is used to examine corporate green bond issuers’ long-run stock market performance, and robustness tests are conducted using the calendar-time method. The authors examine green bond issuers’ long-run environmental performance and carbon dioxide (CO₂₎ emissions using difference-in-differences estimations.

In contrast with the earlier long-run event studies, our results reveal that multiple-time issuers, and issuers operating in industries where the natural environment is financially material, perform financially in the long term relative to the control firms. The authors also document that corporate green bond issuers reduce their CO₂ emissions, and improve their resource use efficiency and environmental performance, in the long run.

To the authors’ knowledge, this is the first study that looks at the long-run effect of corporate green bond issuance on firms’ stock market performance. It has the particularity to document that corporate green bond issuance is beneficial for investors and positively affects the environment. Our findings help us understand that firms do not issue green bonds for greenwashing.