Value of advertising by food manufacturers as investment in intangible capital
AbstractWe use Tobin's q model to investigate the impact of food manufacturers' advertising as an investment in intangible capital. Intangible capital value created by advertising relates to expected growth and economic rents derived from brand equity. We study the relations between advertising and firm value under varying economic and consumer food market conditions from 1973 to 1991. We find that food manufacturing firms' advertising activity is strongly related to intangible capital value during the high value-added food product proliferation of the 1980s, and during recessions, including the 1990 to 1991 recession when consumers resisted higher margin, branded food products. © 1996 John Wiley & Sons, Inc.
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Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Agribusiness.
Volume (Year): 12 (1996)
Issue (Month): 2 ()
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Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297
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- Tobin, James, 1969. "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 1(1), pages 15-29, February.
- Olive Chiboola & Bruce Bjornson, 1996. "Market environment and valuation of invested capital in food manufacturing and distribution industries," Agribusiness, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 12(2), pages 135-146.
- Megna, Pamela & Klock, Mark, 1993. "The Impact on Intangible Capital on Tobin's q in the Semiconductor Industry," American Economic Review, American Economic Association, American Economic Association, vol. 83(2), pages 265-69, May.
- Lee, Seung-Hyun & Makhija, Mona & Paik, Yongsun, 2008. "The value of real options investments under abnormal uncertainty: The case of the Korean economic crisis," Journal of World Business, Elsevier, Elsevier, vol. 43(1), pages 16-34, January.
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