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How do heterogeneous institutional investors influence corporate advertising decisions?

Author

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  • Kang, Sanggyu
  • Chung, Chune Young
  • Choi, Wonseok

Abstract

Marketing increases firm value; therefore, it is imperative to determine the factors affecting corporate marketing decision processes. Considering that the current understanding of these factors is limited, this study examines institutional investors’ effects on Korean firms’ marketing decisions by focusing on advertising spending. We present evidence that institutional investors may play a significant role in such decisions. Further, our results indicate that domestic institutional investors negatively influence advertising spending. In contrast, foreign institutional investors positively impact advertising spending regardless of their investment horizon. These results highlight the influence of external institutions’ characteristics in firms’ marketing decision processes.

Suggested Citation

  • Kang, Sanggyu & Chung, Chune Young & Choi, Wonseok, 2022. "How do heterogeneous institutional investors influence corporate advertising decisions?," Research in International Business and Finance, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:riibaf:v:62:y:2022:i:c:s0275531922000861
    DOI: 10.1016/j.ribaf.2022.101698
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    Cited by:

    1. Abdulaziz A. Alomran & Kholod F. Alsahali, 2023. "The Role of Long-Term Institutional Ownership in Sustainability Report Assurance: Global Evidence," Sustainability, MDPI, vol. 15(4), pages 1-17, February.

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    More about this item

    Keywords

    Advertising spending; Institutional investors; Investor heterogeneity; Korean market;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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