Product Concept Demonstrations in Trade Shows and Firm Value

Trade shows are a popular venue for firms to demonstrate their portfolio of market-ready new products as well as product concepts under different stages of development. Utilizing auto shows as a context, the authors investigate the effects of concept and product demonstrations on the demonstrating firm's value. Event study results show that abnormal returns follow an inverted U-shape effect of product development stages, with previously demonstrated concepts approaching potential launch having the strongest positive effect, followed by the early-stage concepts demonstrated for the first time to the world (i.e., debuts), and then market-ready new products. Trade show locations mediate these effects. The effects of early-stage debut demonstrations are present only when concepts are demonstrated in trade shows located in the home country of the demonstrating firm. However, the effect of displaying previously demonstrated concepts that have survived product development hurdles are present in venues within as well as outside the home country locations