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| Content Provider | Springer Nature Link |
|---|---|
| Author | Lee, Chang Yang |
| Copyright Year | 2002 |
| Abstract | This study derives a formal model of firm advertising behavior and applies it to the industry level to figure out the relationship between advertising and market structure. The firm advertising model shows that both consumer preference andfirm-specific advertising competence jointly determineprofit-maximizing advertising intensity. At the industry level, advertising intensity is represented multiplicatively by consumer preference and a measure of market structure, which reflects the joint distribution of the levels of advertising competence and market shares among firms. The new market structure measure suggests that those single-dimensional measures of market structure such as seller concentration and the Herfindahl index are inadequate in explaining interindustry differences in advertising intensity, and that the long-debated advertising-concentration relationship differs depending primarily on the appropriability of advertising. An empirical analysis of 426 five-digit Korean manufacturing industries shows that an inverted U-shaped relationship between the Herfindahl index and industry advertising intensity is observed for consumer goods industries but a lazy J-shaped relationship for producer goods industries. |
| Starting Page | 89 |
| Ending Page | 101 |
| Page Count | 13 |
| File Format | |
| ISSN | 0889938X |
| Journal | Review of Industrial Organization |
| Volume Number | 21 |
| Issue Number | 1 |
| e-ISSN | 15737160 |
| Language | English |
| Publisher | Kluwer Academic Publishers |
| Publisher Date | 2002-01-01 |
| Publisher Place | Dordrecht |
| Access Restriction | One Nation One Subscription (ONOS) |
| Subject Keyword | Industrial Organization Microeconomics |
| Content Type | Text |
| Resource Type | Article |
| Subject | Strategy and Management Economics and Econometrics Management of Technology and Innovation Organizational Behavior and Human Resource Management |
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