Foreign entry and firm advertising intensity: evidence from China
Journal Publication ResearchOnline@JCUSun, Sizhong
Abstract
This paper investigates the determinants of advertising intensity at the firm level by focusing on the role of foreign entry. In a monopolistically competitive market with heterogeneous firms, we show that foreign entry affects the expected advertising intensity of domestic firms through its impact on the cost of resources, brand image, and productivity spillovers and its impact on firms' exit behaviour. Then, using comprehensive firm-level data from China's manufacturing sector between 2005 and 2007, we test this hypothesis and find that foreign entry significantly affects advertising intensity.
Journal
Review of Industrial Organization
Publication Name
Review of Industrial Organization
Volume
45
ISBN/ISSN
1573-7160
Edition
N/A
Issue
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Pages Count
19
Location
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Publisher
Springer
Publisher Url
N/A
Publisher Location
N/A
Publish Date
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Url
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Date
N/A
EISSN
N/A
DOI
10.1007/s11151-014-9426-z