Corporate advertising expense and share price synchronization

Yixuan Chou and Wenjin Tang

Finance Research Letters, 2023, vol. 56, issue C

Abstract: The article examines the impact of a firm's product-market advertising campaign on stock price synchronization. Based on a sample of listed companies in the Chinese A-share market that have disclosed advertising expenditure, we find that the advertising expenditure of listed companies significantly increases the extent to which information about firm characteristics is incorporated into the stock price, thereby inhibiting stock price synchronization. Moreover, the negative relationship between product market advertising expenditure and stock price synchronization is more significant when the firm's internal and external information asymmetry is higher.

Keywords: Corporate advertising; Share price synchronization; Information asymmetry (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323004981

DOI: 10.1016/j.frl.2023.104126

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