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Investor sentiment and advertising expenditure
journal contribution
posted on 2018-12-01, 00:00 authored by G M Mian, P Sharma, Ferdinand GulFerdinand GulA strategic issue facing marketing managers is ‘how much and when’ to spend on advertising. We argue that investor sentiment in the stock market may influence advertising expenditure by affecting firms' ability to raise new funds. We show that during periods of low (high) investor sentiment, firms decrease (increase) their advertising expenditure, even though the effectiveness of advertising is greater (lower) during such periods. We also find that these results are stronger for financially constrained firms that rely more on external financing. Our findings suggest that marketing managers can improve the efficiency of their advertising expenditure by raising (reducing) it during periods of low (high) sentiment.
History
Journal
International journal of research in marketingVolume
35Issue
4Pagination
611 - 627Publisher
ElsevierLocation
Amsterdam, The NetherlandsPublisher DOI
ISSN
0167-8116Language
engPublication classification
C Journal article; C1 Refereed article in a scholarly journalCopyright notice
2018, ElsevierUsage metrics
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