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Advertising, Concentration and Profitability in Manufacturing

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  • Gisser, Micha
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    Abstract

    This paper predicts an inverted-U relationship between concentration and advertising only for oligopolistic industries facing relatively less elastic demand curves. It rejects the inverted-U theory based on the hypothesis that the large firms collude and lends empirical support to the idea that causation runs from concentration to advertising intensity. By confirming that the effect of advertising on profitability is significant and greater for industries producing homogeneous goods than for those producing heterogeneous goods, this study fails to support the barriers-to-entry hypothesis. Copyright 1991 by Oxford University Press.

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    Bibliographic Info

    Article provided by Western Economic Association International in its journal Economic Inquiry.

    Volume (Year): 29 (1991)
    Issue (Month): 1 (January)
    Pages: 148-65

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    Handle: RePEc:oup:ecinqu:v:29:y:1991:i:1:p:148-65

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    Cited by:
    1. Vlachvei, A. & Oustapassidis, K., 1998. "Advertising, concentration and profitability in Greek food manufacturing industries," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 18(2), March.
    2. Andreas Georgiadis & Christos N. Pitelis, 2010. "The interrelationship between HR, strategy and profitability in service SMEs: empirical evidence from the UK tourism hospitality and leisure sector," LSE Research Online Documents on Economics 28722, London School of Economics and Political Science, LSE Library.
    3. Vlachvei, A. & Oustapassidis, K., 1998. "Advertising, concentration and profitability in Greek food manufacturing industries," Agricultural Economics, Blackwell, vol. 18(2), pages 191-198, March.

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