RISS 검색 - 국내학술지논문 상세보기

다국어 초록 (Multilingual Abstract)

Marketing theory posits that firm-level advertising spending is effective in reducing equity risk (i.e., risk associated with equity holding). However, prior studies using the sample of the firms in some industries showed that the theory might not hold in a specific industry. For example, in the restaurant industry, an increase of advertising expenditures was found to increase equity risk. The counter intuitive results require marketing researchers to understand further why advertising expenditures harm shareholders’ value with increasing their equity holding risk. Using the sample of the restaurant firms, whose advertising was found to increase equity risk, this paper addresses the important question why the firm-level advertising from the restaurant firms is not effective in reducing equity risk. I propose the hypothesis that advertising spending from the restaurant firms, who focus on long-term-oriented marketing communication, will not increase equity risk since long-term-oriented marketing will create marketing intangibles that help to reduce the volatility of future cash flows. Considering the firms in the list of “top media spenders” as the firms who focus on long-term-oriented marketing communication, this paper empirically shows that restaurant firms’ being in the top media spender list would reduce their equity risk and also mitigate the risk-increasing effect of advertising. With the findings, this paper provides important and interesting implications to the literature and advertising practitioners.

참고문헌 (Reference)

1 Osinga, Ernst C., "Why Do Firms Invest in Consumer Advertising with Limited Sales Response? A Shareholder Perspective" 75 (75): 109-124, 2011

2 Mela, C. F., "The long-term impact of promotion and advertising on consumer brand choice" 34 (34): 248-261, 1997

3 Joshi, Amit M., "The Direct and Indirect Effects of Advertising Spending on Firm Value" 74 : 20-33, 2010

4 Kim, MinChung, "Stock market reaction to unexpected growth in marketing expenditure: negative for sales force, contingent on spending level for advertising" 75 (75): 45-68, 2011

5 Srinivasan, R., "Should Firms Spend More on Research and Development and Advertising During Recessions?" 75 (75): 49-65, 2011

6 Biel, Alexander L., "Options and Opportunities for Consumer Businesses: Advertising During a Recession" The WPP Center for Research and Development 1990

7 Tuli, K. R., "On the Value Relevance of Retailer Advertising Spending and Same-store Sales Growth" 88 (88): 447-461, 2012

8 Merton, Robert C., "On the Pricing of Corporate Debt: The Risk Structure of Interest Rates" 29 (29): 449-470, 1974

9 Srivastava, R. K., "Marketing, business processes, and shareholder value: An organizationally embedded view of marketing activities and the discipline of marketing" 63 (63): 168-179, 1999

10 Srinivasan, S., "Marketing and firm value: Metrics, methods, findings, and future directions" 46 (46): 293-312, 2009