Both advertising and research and development (R&D) can be viewed as two
factors crucial to long-term corporate growth. The purpose of this study is to
investigate the effects of the advertising, R&D and interaction between advertising
and R&D on shareholder value concerning economic scale and industry concentration.
The empirical results show R&D investments may generate innovative products
which enhance shareholder value. Moreover, the interaction between advertising and
R&D is significantly and positively related to shareholder value. In practice,
advertising plays a role to build brand awareness for innovative products. Additionally,
we examine how economic scale and industry concentration influence the effects of
advertising and R&D on shareholder value individually. With the respect to economic
scale, advertising and R&D strategies may increase shareholder value more
significantly for firms with high economic scale (large firms). The synergy between
advertising and R&D is only significant and positive for firms with low economic
scale (small firms). This implies that small firms should invest in advertising to build
brand awareness and promote new products while large firms have already developed
brand awareness, so the large firms should specialize in core competences. Firms in
competitive industry rely more on successful advertising campaigns to increase sales.
Moreover, economic scale and industry concentration significantly moderate the
effectiveness of advertising and R&D. Under the limited firm sources, managers
should decide the appropriate mix of advertising and R&D to maximize shareholder
value significantly according to economic scale and industry concentration.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0604110-145750 |
| Date | 04 June 2010 |
| Creators | Chen, Fong-jhao |
| Contributors | Jen-Jsung, Huang, Miao-Ling, Chen, So-De, Shyu |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0604110-145750 |
| Rights | not_available, Copyright information available at source archive |
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