Advertising and R&D: Theory and evidence from France
AbstractThis paper exploits a unique panel of 59,000 French firms over 1990-2004 to investigate the interactions between R&D, advertising and the competitive environment.The empirical findings confirm the predictions of a dynamic model that complements results known in static frameworks. First, more competition pushes Neck and Neck firms to advertise more to attract a larger share of consumers on their products or services. Second, for a given competitive environment, quality leaders spend more in advertising in order to extract maximal rents; thus, lower costs of ads may favor R&D.
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Bibliographic InfoPaper provided by HAL in its series PSE Working Papers with number halshs-00564988.
Date of creation: Dec 2010
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advertising ; innovation ; competition ; Lerner;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-19 (All new papers)
- NEP-CIS-2011-02-19 (Confederation of Independent States)
- NEP-COM-2011-02-19 (Industrial Competition)
- NEP-IND-2011-02-19 (Industrial Organization)
- NEP-INO-2011-02-19 (Innovation)
- NEP-KNM-2011-02-19 (Knowledge Management & Knowledge Economy)
- NEP-MKT-2011-02-19 (Marketing)
- NEP-TID-2011-02-19 (Technology & Industrial Dynamics)
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