Peer effects in corporate advertisement expenditure: Evidence from China |
| |
Institution: | 1. School of Economics and Finance, Huaqiao University, China;2. School of Economics and Finance, Massey University, New Zealand;3. College of Management and Economics, Tianjin University, China |
| |
Abstract: | This study investigates whether industry peers affect focal firms’ advertising expenditure decisions and further explores the mechanisms and economic consequences of such effects. We find that peer firms have a significantly positive influence on the focal firm’s advertising expenditure. The results hold after a series of robustness tests. Additionally, the peer effects in advertising expenditure are more salient in industries with intense competition; and when economic policy uncertainty and demand uncertainty is higher. Interestingly, our results show that followers mimic the advertising expenditure of industry leaders, while leaders also react to followers’ advertising expenditure. We also find that the peer effects in advertising expenditure improve firms’ sales and market value. Our study contributes to a better understanding of peer effects on corporate decisions. |
| |
Keywords: | Peer effects Advertising expenditure Market competition Economic uncertainty China |
本文献已被 ScienceDirect 等数据库收录! |
|