Advertising, quality and sales

David Paton

Applied Economics, 2002, vol. 34, issue 4, 431-438

Abstract: This paper investigates claims that firm-specific effects in advertising-sales models can be attributed to a positive correlation between advertising and product quality. Using a standard Koyck transformation on an unbalanced panel dataset of UK firms, the implied long-lasting effects of advertising disappear when firm-specific effects are taken into account. This conclusion is robust to various econometric approaches. However, when the firm-specific effects are retrieved, they are found to correlate strongly with mean advertising. There is no discernible link between the firm-specific effects and whether a firm perceives quality to be an important form of competition in its market. The results give no support to the idea that advertising affects sales through associated product quality. They are consistent with the persistence of advertising within firms over time.

Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/00036840110046025 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:34:y:2002:i:4:p:431-438

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036840110046025

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().