From marketing to manpower: Impact of advertising expenditures on employment

Wenjun Xie and Yao Chen

International Review of Financial Analysis, 2025, vol. 104, issue PA

Abstract: This study investigates the impact of advertising expenditures on corporate employment levels and explores the underlying mechanisms. The yearly data of Chinese listed firms between 2012 and 2021 demonstrate the unintended impact of advertising in the product market on corporate employment. Empirical findings confirm that advertising positively affects employment, with a stronger effect observed in consumer product industries, firms with higher information asymmetry, firms led by executives with marketing backgrounds, and companies with higher labor intensity. Mechanism tests show that advertising affects employment by reducing financial constraints, increasing production scale, and reinforcing brand value. Furthermore, advertising expenditures improve firm performance and employee wages by optimizing human capital structure and increasing labor allocation efficiency. Overall, this study represents one of the few efforts that substantiates the role of advertising in improving corporate employment. Our findings have practical implications for improving internal employment structure.

Keywords: Advertising; Employment; Financial constraints; Production scale; Brand value (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:104:y:2025:i:pa:s105752192500420x

DOI: 10.1016/j.irfa.2025.104333

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